Planning / Restructuring

Planning / Restructuring

The client
Three family-owned investment companies had been formed by the current shareholder’s father. The companies owned circa £50m of assets including land with significant development potential, farmland, commercial property and a sizeable residential property portfolio. After his death, the adult siblings inherited the shares directly and via family trusts. Across the three companies, the shares were held unevenly by different family members and trusts.

The siblings wanted to hold the development land, jointly but preferred to own their remaining assets separately and pursue their own business objectives, rather than having to jointly own and manage the existing companies but were concerned about the potentially very large capital gains tax and SDLT costs of moving the real estate assets out of the companies.

Our involvement
We worked with the shareholders to understand which assets they each wanted to hold going forward, the values and tax profile of the assets and their current location within the three companies.

We designed a complex group reorganisation to first combine the existing companies, build a new group structure to allow the reorganisation of the assets as required without triggering any tax or SDLT costs, but at the same time allowing an uplift in the capital gains tax base cost of the assets, and finally a complex demerger process to split the group under five new holding companies to meet the shareholders required final structure.

The outcome
The shareholders achieved their goal of holding development land in a jointly owned vehicle, but also having their own personal holding company structure to hold their share of the other group assets. This allowed each shareholder to own and manage their share of the inherited assets within their own family without having to consult with their adult siblings. The restructuring was completed without any income tax, corporation tax, VAT or SDLT costs.

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