Tax pros and cons of family investment companies

Many business owners are considering making gifts during their lifetime, rather than through their will due to changes to business property relief, but does this make tax sense, asks Chris Etherington, partner at RSM

One of the consequences of the Autumn 2024 Budget announcements on inheritance tax (IHT) is that many families are now considering passing assets on to the next generation sooner than they might have otherwise planned.

An increasingly popular answer to this problem is the family investment company.

The changes to business property relief and the impact on IHT liability is causing a dilemma for some business owners who want to retain some control, and ensure any gifts are invested wisely.

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