Inheritance Tax Case Study

Inheritance Tax Case Study:

Can you limit a family’s exposure to IHT?

Inheritance Tax Case Study – UK family construction company with various differing share ownerships.

We were approached by a family construction company with various differing share ownerships. When we met with the family we established that creating a consolidated group was the best way forward.  

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During the initial meeting we established that some senior family members owned the various trading premises in their own names and we quickly identified that this left them exposed to Inheritance Tax.   The family were keen to mitigate this. 

The family engaged us to create the consolidated group and mitigate their exposure to Inheritance Tax.

“An important point here is that we often find that businesses do not plan for the longer term when they are investing in new premises, plant or machinery. These are often decisions taken at speed to keep the business turning over, but sometimes, with careful thought and planning there are steps you can take that mitigate your exposure to things like VAT, Corporation Tax, Capital Gains Tax, Inheritance Tax, etc. Some actions are hard to “undo” so it is always worth seeking professional advice before you take action”.

In this instance RPGCC’s tax team transferred the properties into the group which saved millions in Inheritance Tax. It also provided capital in order to leverage funds for expansion.

The excess cash in the new group was used to create a finance company (internal bank). This trading entity will eventually be demerged and, again, this will save £millions in Inheritance tax as it will be a trading entity.

The overall saving of Inheritance Tax for the family equated to £10m+

Inheritance Tax case study RPGCC London Accountants EC4

How did we help?

In the case of this Inheritance Tax Case Study we were able to:

  • Consider the existing company formation and share allocations
  • Recommend a consolidated group structure
  • Transfer property ownership from the individuals personally to the business
  • Add capital to the business which enabled them to seek additional funding
  • With additional funding the business was able to expand

We saved the family in excess of £10m in Inheritance Tax.

Have you considered your family business structure?

How sure are you that you have considered your exposure to IHT and other taxes?

If you would like to speak to a member of RPGCC’s tax team about any area covered in this Inheritance Tax Case Study, or indeed any area of tax, please contact them today. They are happy to meet with you on a no obligation basis for an initial discussion and break down complex tax issues into something manageable for you and your business.

Arranging a free meeting with our Tax team is easy contact us or telephone us on 020 7870 9050. Or you can visit our web chat in the bottom right corner which is manned during office ours and you can leave a message out of hours.

The RPGCC team are always just a click or call away. Could you be our next Tax Case Study?

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