Many couples draw up simple Wills whereby on the death of the first partner the whole of the estate passes to the survivor, and on second death to children or other family members. For someone who is not in a relationship often the estate is passed directly to children or other family members.
Where the deceased is a business owner then what is the impact on the business, any surviving business partners, and your spouse/partner, children and other beneficiaries when a “simple” Will is drafted? What are the issues with regards to Inheritance Tax? What is the impact if your spouse/partner or other beneficiaries:
Under certain conditions some business assets (e.g. shareholding) and AIM-listed shares will qualify for 100% Business Property Relief (BPR) meaning that, regardless of value, they are totally free of Inheritance Tax (IHT). Although IHT may be avoided when these business assets pass via your Will, if these are then subsequently sold or if this tax relief is abolished between 1st and 2nd deaths, the proceeds will become taxable. So your children or other beneficiaries may be obliged to hand over 40% of their inheritance to the government.
By gifting your business assets via your Will into one or more Business Property Relief Trusts the issues bullet-pointed above can be mitigated.