I need to wind up an IIP trust, of which the life tenant has just died. She was the widow of a farmer in partnership with other family members, the only asset he owned was his partnership share. The partnership agreement stated that the continuing partners had an option to purchase his share which should be exercised within 9 months from the date of death, failing which the partnership would dissolve. The option was not exercised and no agreement documented, but the business carried on as normal, and the deceased’s profit share was paid to the widow.
What is the trust asset now - is it merely the value of the original partnership share following the dissolution that the PRs could have called for? Or could it be said that there has been a partnership at will now of which the trustees became partners, and so business relief would apply.
One issue is that the PRs were not involved in any way in the business and did not explicitly agree to the arrangements, although it could be said they acquiesced.
I’d welcome any comments.
Andrew & Co LLP