Tax

If they were shareholder there would be zero IHT because they own the shares in the company

if the Mother and Father owned the share there shares would be liable for IHT

This is the good thing from the company point of view shares can be passed to children to avoid IHT

without touching Mortgages ect

So everyone should make their children shareholders in their SPVs and LTDs before they die? Does it make any difference how the shares are apportioned?

If you live 7 years the shares are outside IHT but you have to take advice and think hard about it

let’s say you give your children the shares and they marry and then they devorce the spouse would be in titled to have there shares so you could be running your company with someone you don’t really know and then the ex marries a new hubby or wife

succession needs a lot of thought

I know one family company who did pass there shares to there son and he was killed in an air crash so his estate had to pay IHT

its so long term this is why I prefer a family trust even if there is an IHT bill

Hi Tony

From a lending point of view, I have to disagree with most of what you have put except I agree they do not like BICT and action is being taken by lenders on this.

"Whilst not in themselves direct transactional costs, being a commercial borrower impacts you in the following ways"-

• Significantly reduced choice of lenders and higher interest rates; the majority won’t lend to limited companies, and none are keen on BICTs as they fundamentally weaken their ability to pursue the debt.

There are more lenders now and if you are portfolio landlord with 10+ then very little difference

• Lenders will mostly require full personal guarantees on a joint & several basis from all the directors and shareholders (if the company goes bust you remain responsible for the debt).

No different than owning personally

• Lenders will take a debenture (legal charge) over the company’s balance sheet, which restricts your ability to make best use of your director’s loan account if at all.

Very few lenders do - as the guarantee is enough - if there is no guarantee they will as that is their security

• You’re tied in to the first lender and their appetite for further lending, if any, meaning that each new acquisition or remortgage may need a new lender and a new company if your existing lender isn’t interested.

Disagree I have clients with one company and multiple lenders

• If property prices fall thereby increasing the loan to value beyond the point to which the lender originally agreed, you’ll have to find the cash difference

 Same as in personal name although if covenanted then agree but plenty don't

• Restrictions on what you can borrow for i.e. remortgage to fund lifestyle.

Same as in personal name

When schemes go wrong:

https://www.theguardian.com/football/201...mands-hmrc