Shareholders agreement

Could your shareholders agreement create an unexpected IHT bill on your death?

Could your shareholders agreement create an unexpected IHT bill on your death?

Private company shares usually attract 100% Business Property Relief for inheritance tax (IHT) purposes, meaning your estate won’t be subject to charges on the value of those shares.

This means you could leave shares in a business worth millions of pounds, free from IHT!

However, a binding contract made prior to death in a shareholders agreement, for the sale of the shares, could jeopardise that relief at the expense of your loved ones.

A ‘Buy and Sell’ agreement could be the solution…

Properly structured business agreements are akin to having a will for the business and forms an essential part of your succession planning.

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