A partnership might be the best solution for you; it is a very flexible structure and can suit a diverse variety of businesses and circumstances.
We always recommend that you record the rights and responsibilities of each partner in a Partnership Agreement to regulate the partnership and put your business on a sound footing. This will also help to avoid the potential for confusion or disputes arising in the future. In the event of issues within the partnership, the Partnership Agreement may avoid a costly dispute.
We can tailor a Partnership Agreement to the specific needs of your business and its partners. We can provide expert advice on matters from profit sharing and day-to-day working arrangements to what should happen following the death or retirement of a partner or in the event of a dispute.
It is critical to review the way in which agricultural and business assets used by the partnership are owned. Land, machinery and other equipment may be eligible for valuable tax reliefs but to qualify the documentation is often vital. If assets are held by the partnership relief is often available at 100% for inheritance tax whereas assets used but not owned by the partnership will receive relief at a reduced rate of 50% at best.
We can advise on the availability of tax reliefs, changes to the structure of the business, or the ownership of farmland and other assets, all of which may boost the tax relief available and reduce or eliminate the final tax liability.
Work undertaken recently includes:
- Advising upon the structure of farming businesses and partnerships, the admittance of sons / daughters into partnership, the partnership deed and the tax implications of such changes.
- Advising upon the appropriate arrangements to hold family property to include the introduction of property into a farming business and of the use of trusts in order to maximise the agricultural and business property relief available to reduce future inheritance tax.
- The introduction of capital, land and assets into a partnership (often reflecting but importantly documenting the existing arrangements).