Weightmans acted on behalf of a family with a complex rural portfolio.
As part of a restructure and succession plan, the father wishes to transfer his assets to his adult children.
Time was of the essence, bearing in mind his age and poor health.
PW – The restructure aim was to get value down to the next generation making use of present BPR allowances during the transition period to future proof the business. Use of trusts provided for family members whilst protecting the value from third parties and ensuring control remained with the management team.
OMB – with children, partners and grandchildren working in the business, and also children and grandchildren who did not involve themselves with the business, it was important for the father to make fair transfers. With the assistance of a tax partner and roundtable discussions with the corporate team, the father was able to look at various options. The outcome being that the children and grandchildren involved in the business were gifted a proportion of the shares and a small portion was gifted into trust, for the benefit of the remainder of the grandchildren. The father also wanted to have continued involvement in the business whilst he lived, so he retained a small shareholding with enhanced voting rights. This required tax advice as enhanced voting rights can cause value shifting in shares.
We also considered rewarding existing employees through issuing growth shares.
Finally, to ensure the company had governance documents that reflected the father’s wishes, we put bespoke articles and shareholders agreement in place to offer regulation, guidance, future proofing, and flexibility.
One of the children who was expecting to inherit was in the early stages of a divorce. Prompt and efficient advice was necessary to ensure that child’s share of the estate didn’t simply end up in the matrimonial pot for divorce. Alongside protecting the family’s interests in the divorce, our expert family team were able to advise on the benefits of the other children putting in place pre and post nuptial agreements in anticipation of the changes.