Helen Hamilton
In the intricate landscape of family-owned businesses, the transition from the first to the second generation is often a perilous journey.
Statistics reveal that a staggering 70% of family-owned enterprises fail to successfully transition from 1st to 2nd generation mainly due to a lack of planning.
2nd to 3rd generation and onwards the odds are stacked against a successful transition even more with over 97% fail rate. That’s a lot of hard work and effort building a Family Company for it to have such a small chance of still being in the family and profitable for future generations.
Acknowledging this critical issue, Oldgate Trustees, a boutique Tax, Trust and Company Law specialist firm has vast experience in working closely with Accountants helping, advising and drafting the documentation for family businesses seeking a robust strategy for the future.
The collaboration between Oldgate Trustees and the clients’ Trusted Accountants is centred on the core objective of future-proofing businesses, after all when a business fails or comes to an end the Accountant also loses a valuable client.
The intricate web of tax laws and regulations can be overwhelming for business owners, especially when transitioning to the next generation and interweaving the planning with personal wealth issues. With the combined expertise of suitably qualified and experienced legal professionals and Accountants, clients can navigate the complex landscape with confidence and avoid the ticking time bomb that sits underneath many family businesses which can be detonated by the death of a family member often resulting in a very challenging family fallout if family members feel they have been disadvantaged.
The key to Intergenerational planning success lies in working closely with Accountants, and sometimes with other financial inputs combining legal expertise with financial acumen to create a holistic approach that considers both tax implications and business continuity with the needs of the family and those members who rely upon income and assets provided by the business for their livelihood.
A critical area to consider is protecting business assets and securing business reliefs which can be lost if the business is too overweighted in Property or cash capital. Cleansing exercises can be combined with a range of other planning benefitting in mitigating taxes, effective profit extraction from the business, reviewing share classes and the use of Trusts to keep family money, where it belongs, in the family.
The success stories arising from Oldgate Trustees’ collaborative approach are numerous. Families that once faced uncertainty and potential pitfalls in transitioning their businesses now find themselves equipped with a roadmap for the future. The synergy between legal expertise and financial insight has proven to be a winning combination in safeguarding family legacies and ensuring the continued success of businesses beyond the first generation.
Whilst nurturing that all important relationship with the Accountant for generations to come, working hand-in-hand to create a seamless and comprehensive advisory team safeguarding the interests of both the business and its owners.
Helen Hamilton
Director
Oldgate Trustees Ltd
Tax Trust Legal Advisory