Entrepreneurs prefer to sell their businesses, leaving liquid assets to their next gen’
Damian Bloom, partner BLP law, also says that more and more UHNWIs put younger family members on the board of the family foundation to teach them financial and fiduciary responsibility.
What should UHNWis be aware of when transferring a business to their children?
It is important to distinguish between the succession of wealth, and succession of control. Both need very different approaches. We find that the families that manage this most successfully are those that deal with it over a long period of time, rather than trying to resolve it as a single project.
What trends do you see in the industry you can tell us about?
Increased use of charities as a tool for educating the next generation. Putting younger family members on the board of the family foundation, helps to teach financial and fiduciary responsibility.
Should family business owners sell rather than pass their operations to their children?
Whilst the UK tax system favours the transfer of trading businesses, individual entrepreneurs often feel the need to wind up businesses during their lifetime, to leave a more liquid pool of assets. However they will lose tax protections. Nevertheless, there are other planning options to explore.