What is a Will?
We realise that people do not like to think about death but preparing a properly constructed Will means that your loved ones do not have the additional burdens of a complicated probate when things go wrong.
A Will is a legal document that documents how you would like to divide up your estate, who should inherit your assets and conversely, it ensures that your assets cannot be inherited by individuals that you do not wish to benefit from your passing.
If you are a business owner then the assets of your business or your share in assets owned by the partnership will be treated as part of your estate.
What will happen to my business?
If you are a company owner and you wish to pass on the business to another person in the event that you die then it is a good idea to make a Will. Writing a Will presents you with the opportunity to ensure that the business passes to those whom you would like to take over and in turn ensuring the future of the company is in safe hands the running of the business.
What will happen to the assets of my company if I die?
If you make a Will you will normally be able to control what happens to the assets of the business, or your share of the assets.
If you don’t make a will, then the assets will pass according to the “rules of intestacy”. This may result in your assets passing other than in accordance with your wishes. For more information about the rules of intestacy read our article called “what happens if I die without making a will”.
Inheritance Tax implications
Inheritance Tax is a tax which is payable by the estate of a person when they die if their estate is above the Inheritance Tax threshold. Inheritance Tax is also payable sometimes on gifts or trusts made in the seven years before a person’s death.
When can Business Relief be claimed?
Business Relief can be claimed in the following circumstances:
- A business or an interest in a business;
- Shares that are not listed on a recognised stock exchange;
- A holding of shares or securities which give you control of a company that are fully listed on a recognised stock exchange;
- Land, buildings, plant or machinery that are used wholly or mainly by the business during the last 2 years before the business was passed on or since the business acquired them more recently;
- Land used by the business and held in a trust where you had the right to benefit from.
What relief is available?
The rate of Business Relief depends on the type of asset in question.
For the following types of asset 100% relief is available:
- A business or interest in a business;
- A holding of shares in a company that is not listed on a recognised stock exchange.
The rate is 50% for the following types of asset:
- Shares controlling more than 50% of the voting rights in a company listed on a recognised stock exchange;
- Land, building, plant or machinery used by a business that you are a partner in or over which you have control at the time of your death.
By making a will you may be able to reduce your estate’s liability for Inheritance Tax or even avoid your estate from paying it altogether.
Wills & Probate Specialists at Bowden Jones Solicitors
At Bowden Jones Solicitors we have a vastly experienced Wills and Probate Team who focus on giving our clients the best possible advice, often in very difficult circumstances. Our friendly approachable professional lawyers will take the time to be available to listen and to understand your situation.
Should you require advice from one of our specialists then please call 02920 48 45 50 or simply click here