FAQs

You should prepare a will to set out who you would like to benefit from your assets (including your farm) on your death. It is important to think about who you would like to benefit from your assets and what the tax implications might be. Inheritance Tax needs to be considered on death, where a liability arises this can be detrimental to businesses, particularly farms with high capital asset values where there may not be cash available to fund the liability. To help mitigate the inheritance tax due there are two important Inheritance Tax reliefs which can apply to farms where certain conditions are met.

It is important to review the whole farming enterprise and your personal financial position to identify where Inheritance Tax reliefs are available. Agricultural Property Relief can provide relief against Inheritance Tax at 50% or 100% of the agricultural value of an asset. Where farms are heavily diversified or have non-agricultural value, e.g. hope value for land development, Business Property Relief can provide relief at either 50% or 100% of the value of an asset.

Once your current position has been established consideration can be given over whether you can improve the inheritance tax reliefs available to you and if you should consider planning giving assets away in your lifetime.

Few people can talk about their deaths comfortably with their family and loved-ones but it is essential to have open and honest discussions so that everyone is aware of your wishes. This is particularly important where you have multiple children, some that are involved in the farming business and some that aren’t.

The rules surrounding Inheritance Tax and the reliefs available are complex and so it is.

Charities need an independent examination (rather than an audit). If your gross income is:

• Between £25,000 and £1,000,000 where your gross assets do not exceed £3,260,000; or
• Between £25,000 and £250,000 where your gross assets do exceed £3,260,000

Charities with an income not exceeding £25,000 are not required by law to have an independent examination, but you can choose to.

You will usually need to think about and audit as you approach Series A, when the numbers get larger and investor scrutiny increases. We always advise on audit readiness before it becomes urgent, so there are no surprises.

If you’re a trustee, it may be that a trust has served its original purpose and you’re not sure how, or if the trust can be brought to an end. Unfortunately, trustees commonly only know they should have taken action when something goes wrong. Often, there are significant assets involved, and sometimes it’s hard to see the wood for the trees. We’re here to give you a clearer picture.

If a family member had a trust put in their will, you may have been left administering the estate and trust. When this is the case, sometimes you might not even have known a trust was created, much less how to deal with it.

We have a specialist trust team with deep experience across UK and offshore structures and a strong professional network in Cambridge.

If you’re a family member or friend who has been named executor, you already have a lot to deal with. Even if you’re used to completing official forms, liaising with HMRC and going through the legal process of obtaining probate can be overwhelming. And it’s more complicated if someone has died without a will, as there are rules about who can apply for the grant and who will inherit (and how much). It’s not always what people expect.

Often, you don’t know what you don’t know. Our friendly team is here to help. Please get in touch for an initial chat.

Yes! Perhaps you have a large family. Maybe you’re a busy entrepreneur. Trying to understand inheritance tax. Or living overseas. Whatever your unique situation, you’ll benefit from the technical expertise and experienced advice of your dedicated senior adviser.

A replacement of a main residence can be achieved by gifting the former main residence, as this still counts as a disposal. However, a gift to your spouse would not avoid the surcharge as neither the purchaser nor your spouse can retain an interest in the former main residence to be outside the surcharge. Gifts should be considered carefully, as they could create other tax liabilities, such as capital gains tax on disposals, inheritance tax and income tax on future rental income.

A replacement of a main residence can be achieved by making a gift of the former main residence, as this still counts as a disposal. However, a gift to a spouse would not avoid the surcharge as neither the purchaser or their spouse can retain an interest in the former main residence in order to be outside the surcharge. Gifts should be considered carefully, as they could create other tax liabilities, such as capital gains tax on disposals, inheritance tax and income tax on future rental income.

The answer here depends on whether you are a married/in a civil partnership or are unmarried. A husband and wife each own a residential property (with neither having any interest in the other’s property) but both live in the property owned by, say, the husband, with the property owned by the wife being rented out. If they sell their main residence and jointly buy a new one the higher rates will not apply to the joint purchase. As they are married and have both lived in the property owned by the husband as their main residence they will both be treated as replacing their main residence, even though the wife retains the rental property. An unmarried couple (A and B) each own a residential property and both live in the property owned by A, with B’s property being rented out. If the main residence is sold and they jointly purchase a new one, which will be their new main residence, the higher rates will apply to the joint purchase of a new main residence. As they are not married (or in a civil partnership) B will not be treated as replacing his main residence as, even though he has been living in the property owned by A, he has no interest in the property A is selling.

It depends on whether you’re married or in a civil partnership, or unmarried.

If you’re married, and you both live in one spouse’s property while the other property is rented out, selling that main residence and jointly buying a new one means the higher rates won’t apply. Both spouses are treated as replacing their main residence, even if one retains a rental property.

If you’re unmarried, the position is different. Because you have no legal interest in your partner’s property, you won’t be treated as replacing a main residence when you jointly buy. The higher rates will apply to the purchase.

For the year 2020 to 2021, it was announced that the business rates retail discount will be increased to 100% for all properties with a rateable value of less than £51,000, and for all businesses in the hospitality and leisure sector, such as museums, theatres, gyms and pubs.

The Share Purchase Agreement (“SPA”) is the main transaction document and often runs to hundreds of pages, depending on the complexity of the deal and the buyer’s jurisdiction. It brings most of the elements of the transaction together, such as the structure, warranties and covenants, schedules of key information, definitions, completion accounts mechanism and templates.

This document is typically drafted by the buyer’s solicitors but will have input from all parties such as lawyers, accountants, corporate finance and tax advisers on both sides. It is where the detail matters most.