I was presented with a problem today with a high-value client who has £2.5m worth of shares in his company. He is a consultant for the company. As is typical, he was pushed for time and just dropped this in at the end of our meeting.
I’m trying to think of a way to potentially put the shares into a lifetime trust changing the ownership without encashing them (which he says he can’t do) to protect them from the usual. I need to discuss this with him further but has anyone got any suggestions I could research and the right questions to ask?
I’m not sure how long he’s had these, but they are doing well. He hasn’t got an IFA and his estate is in a bit of a mess. I’m here to sort it out!!
Cheers - Chris Rugby Wills
If the shares are owned by Mr, then what is the issue of him gifting them to trust other than IHT lifetime allowance? CGT holdover should be available. Or am I not reading it correctly?
It would be worth investigating whether a transfer of the shares potentially qualified for IHT business relief.
Your client is described as a ‘consultant’ to the company. I think it would be useful to determine if he was an employee and/or director. If not, what is his precise relationship?
Has he considered transferring a parcel of shares to a spouse (assuming he has one)?
Trustees, holding as their only asset, shares in an unlisted company, need to consider investment diversification. This might well involve selling some shares - a course of action which would not be in line with the client’s expressed wishes. Specialist advice should be taken before any transfers to trustees are executed.
Could he use his pension to buy the shares from himself. can be trickier these days if unquoted to find a willing pension provider, but allows him to still have beneficial ownership of the shares if not allowed to sell them to a 3rd party?