Case studies from
THE SOURCE

Family ties

Family ties

A Case Study of: The multiple business owning family

The Opportunity

Acting as tax advisers for a family that part owned a collection of valuable businesses who, with the other shareholders, wished to sell their holdings to diversify their risk profile, improve immediate cashflow and preserve inheritance for future generations.  The situation was complicated by shares which had already been gifted and were subject to the seven year rule where the IHT relief on the original gift is revisited in the event of the demise of the donor.

The Solution

The deal was delivered under significant time pressure, whilst with multiple professional advisors for the various families concerned, including our client. Given that the sale was to a large non UK based private equity fund, a balance was struck using a combination of preference shares to de-risk the IHT issue and ordinary shares for the younger generations to mitigate IHT exposure and finally cash with which a diversification could take place.

The Outcome

The deal was turned around in less than three months – working with multiple  parties required round the clock availability from our expert team.  The transaction was effectively structured to provide sufficient immediate funds to cover the consequent but deliberate CGT burden, as well as short and mid-term liquidity, and protected the on-going shareholding in the buyer company from any downturn.

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