Does anyone know how to escape paying inheritance tax if your parents own a business and you work for them? I know there's a way around it by issuing shares in the company and possibly setting up offshore trusts. Anyone know?????
2006-10-27 02:45:22 · 7 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United Kingdom
Well, my parents really care since they've spent years and years sacrificing, building a successful business and paying taxes their entire lives, they don't want Gordon Brown to get his grubby hands on a massive portion of it and basically get taxed again when they die!!
2006-10-27 03:05:58 · update #1
The business probably qualifies for 100% business property relief in the UK and therefore won't give any IHT liability even if it does not pass until their deaths. However, this would only apply to the business assets (ie if there are investments held by the business/surplus cash these values would not get relief). There are specific areas that might cause problems - I assume this is a company and not a partnership yes? Whether the business premises are owned by the company or your parents personally may affect the relief available.
It is a complex area and you will need detailed advice from an accountant to ensure the IHT payable is minimised - not something that can be covered in enough detail on this forum. Eg, if BPR applies at 100% there is no need for your parents to take any action to avoid IHT other than setting up their wills correctly, but that might not be the best long term plan as some pre-death share gifts could lower your (or siblings' etc) capital gains tax liability on a subsequent disposal.
For a little cost now on the advice (which you would end up paying at some point anyway) you should be able to get the tax way down.
2006-10-27 04:42:26 · answer #1 · answered by guido74 3 · 0⤊ 0⤋
Buying the business before they die. If you have time, transfer small amounts ( 25%) at a time.
2006-10-27 09:47:36 · answer #2 · answered by Anonymous · 0⤊ 0⤋
This is going to depend on your jurisdiction.
If the business is worth much, its certainly worth getting decent legal counsel on this.
2006-10-27 09:53:18 · answer #3 · answered by kheserthorpe 7 · 0⤊ 0⤋
get them to transfer it into your name NOW and hope that they don't die in the next 7 years
2006-10-27 09:54:29 · answer #4 · answered by Anonymous · 0⤊ 0⤋
my parents put their estate in a LLC (limited liability company), speak to an attorney about different options. me and my sibs paid no inheritance taxes.
2006-10-27 09:48:51 · answer #5 · answered by Anonymous · 0⤊ 1⤋
They can transfer ownership to you in small increments every year.
2006-10-27 10:06:06 · answer #6 · answered by brenden b 2 · 1⤊ 0⤋
who really cares!!
2006-10-27 09:52:24 · answer #7 · answered by xochelsxo16 3 · 0⤊ 2⤋