Antoaneta Proctor, partner in the Private Client team, discusses how the second wave of Covid-19 is changing entrepreneurial families’ focus from operational resilience and contingency planning, to more structural issues and strategy for success of their businesses in a post-Covid world. She highlights how recent events are disrupting the intended divestment of businesses and transfers to the next generation, with business families having to contend with the changes to capital gains tax entrepreneurs’ relief (now business assets disposal relief) in Finance Act 2020 and the anticipated tax changes to come, which could take the form of further reform of capital gains tax, as well as reform to inheritance tax and a possible UK wealth tax, to help the government recoup the cost of the pandemic.
However there are opportunities presented by the current situation as now is a good time to consider lifetime giving and involving the next generation whilst some asset values are depleted and consequent tax charges on transfers are minimised. Families who have the agility to transform, boldness of vision to innovate and foresight to empower the next generation will be best placed to weather the uncertain times which lie ahead. Getting integrated advice, which is commercial, works within but also redefines the wider family dynamics and takes account of the evolving tax and economic landscape is key to supporting entrepreneurs and their family offices in articulating and executing appropriate business succession planning, in its many guises.
This article was originally published in Campden FB on 27/10/2020. Please click here to read the full article.