Helping entrepreneurs achieve IHT savings of over £5 million

In the past few months, Ludlow advisors have helped clients in setting up BPR trusts for their families prior to business exits, potentially saving those clients over £5 million in inheritance tax.

For many clients, the most that they can put into trust for their family is £325,000, every seven years. Though this can still give significant IHT savings, whilst providing for future generations, even greater opportunities are available via BPR trusts.

BPR trusts are a great opportunity for entrepreneurs intending to sell their business to set aside some of their company shares in advance of the sale. These shares are placed into a family trust, for the benefit of the entrepreneur’s children, grandchildren or other nominated beneficiaries. As the shares qualify for IHT relief (known as BPR), the value of the shares that can be gifted is unlimited. The only caveat is that the entrepreneur client cannot have the gifted funds back for themselves.

By making gifts of over £14 million into trust for their families this year, a number of Ludlow clients have been able to make use of this, often one off, opportunity to ensure that their children and grandchildren are properly provided for, whilst reducing the IHT bill when the clients pass away.

Yana Davies, Trust Manager, said “It always surprises me how few entrepreneurs are aware of IHT planning prior to their business sale and the opportunities it can provide. Many lawyers and tax advisors are focused on the sale rather than looking beyond at the longer term position, and it can often be too late if the sale has already gone through. I am delighted to be part of the Ludlow Trust team, able to help our entrepreneur clients make use of these significant planning opportunities.”

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