Front of mind for many family-run holiday parks is how to ensure a smooth succession to the next generation, whilst preserving the value of your business – and inevitably inheritance tax (IHT) planning will be a big part of this thinking.
Achieving the best result requires not just a comprehensive knowledge of the tax system; equally important specialist knowledge of the holiday parks sector, and an understanding of the wider issues involved in family businesses. Lovewell Blake’s specialist Holiday Parks team is offering you a free one-to-one consultation to explore family succession issues and to explain the various ways to mitigate tax charges, including Business Property Relief, gifts and trusts.
Business Property Relief (BPR), when available at the main rate, reduces the value of an asset to nil for IHT purposes. However, the relief is rarely available for businesses in this sector so alternative strategies need to be considered.
One such strategy is gifting assets during your lifetime. However, the capital gains tax (CGT) position needs careful consideration, because a gift is regarded as a disposal for CGT purposes. Holdover relief can be available to prevent CGT liability being triggered, but once again the particular nature of the holiday park sector means this will only be available in restricted circumstances.
For some, trusts might be the solution. Within a trust, holdover relief is available regardless of the nature of the asset, but the value you can settle on trust is restricted. Each case is different, and you need to consider the pros and cons from an IHT and CGT point of view – but planning at an early stage should enable considerable value to be removed from your IHT estate over a period of time.
This is all complex, and for most holiday park owners, clear guidance from people who understand the sector, the particular needs of family businesses, and the various tax options, is vital.
To claim your free one-to-one family succession consultation with a member of Lovewell Blake’s specialist Holiday Parks team, contact Andy Miller