I sat with two brothers last month. The company their father had built over 40 years was the wall between them. The estate was worth £3.2 million, most of it tied up in the family engineering firm. The sons, both in their fifties, had worked there since they were teenagers. Now they were communicating only through solicitors. The human cost was absolute.
The Structural Failure This was not a personal dispute. It was a failure of planning. Their father's will simply stated the business should be "shared between my sons". Eleven words to decide a lifetime's work. It failed to specify ownership percentages, control, or a mechanism for disputes. One son wanted to sell. The other wanted to continue his father's legacy. Both believed they were right.
To complicate matters, a Lasting Power of Attorney for business affairs had been granted to one son two years prior. The other son was now legally contesting its validity, claiming their father was not of sound mind. On top of this, we found a £500,000 personal guarantee the father had made against a business loan. This debt attached to his personal estate, not the business. The fallout from these gaps was immediate: legal fees north of £50,000 within three months, with no end in sight.
A Clear Line of Sight For UK families with business assets, the implications are stark. Business Property Relief can be a powerful tool, potentially making a trading business 100% exempt from Inheritance Tax. But that personal guarantee complicated the IHT position. Because the loan was secured against personal assets, the debt reduced the value of the personal estate, but it could not be set against the value of the business for tax relief. A clear succession plan, using cross-option agreements funded by insurance, would have provided a clean outcome. It would have cost a fraction of the legal fees.
These conversations are not easy. My work is to help you have them before it's too late. If this raises questions for your own family, we should talk.
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Written by Sean Kiani, Estate Planner at Inheritance Made Simple. Sean writes and reviews the firm's guidance on estate planning, wills, trusts and inheritance tax, and works with families across Bournemouth, Poole, Dorset and Central London. Verify Sean's Society of Will Writers membership listing.