Lifetime succession planning for the family trading company

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

This guidance note considers what the shareholder of the owner managed trading company should consider when planning for the future of the business. The options can be to do nothing and make a gift on death, to make a lifetime gift, a purchase of own shares or to sell the shares. These options are considered below along with the BPR consequences and pitfalls. The other taxes involved are considered briefly but this note focuses on the BPR effects for IHT.

Lifetime succession planning ― overview

Founders of successful trading companies are often reluctant to consider their retirement or the future of the business after their death. For many entrepreneurs, their identity is tied up in the business and they find it psychologically difficult to consider separating themselves from it. Some may have no children to pass the business to and others will have several children who are variously able / unable and suited / unsuited to continuing

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