It is important that any business has the correct structure. Where an agricultural business is family owned, it is their home as well as their business, and where they are looking to maintain the business across generations then the structure becomes even more important.
The structure could include a sole trader, a partnership, a limited liability partnership, a limited company or a combination of these.
The factors to be considered when deciding on the business structure include:
• The ownership of the underlying assets
• The family situation, i.e. whether the next generation wish to be involved in the business
• Benefit in Kind issues of having assets within a limited company
• Tax benefits of profitable trading businesses being within a limited company
• Availability of loss relief of trading losses against other income
• The availability of Agricultural Property Relief and Business Property relief for Inheritance Tax on the farmhouse and other assets
• Other assets held by the family outside the business
• Whether the business or some or all of the underlying assets may be sold in the near or distant future
• Whether any of the land or buildings may be developed in the near or distant future
• Whether the assets are likely to be gifted to the next generation or held
Contact us to discuss your own situation and find out how we can help you.