![\"\"](\"https:\/\/www.goodmanjones.com\/blog\/wp-content\/uploads\/2019\/06\/iStock-485652981-300x200.jpg\")
<\/p>\n<\/p>\n
<\/p>\n
Charlotte\u2019s excellent commentary on family businesses<\/a> and the need to look at succession planning strategically identifies the particular complexities that family businesses experience. As she says \u201cIt gets complicated by the personalities, relationships and the emotions of the people involved. That\u2019s why it has the potential to go devastatingly wrong\u201d<\/p>\n The tax tail should never wag the commercial dog. Despite this, tax is always a concern for a family business. There is an argument that family members are more concerned about tax than professional management within a larger business. This is because any tax payment ultimately comes from the family\u2019s pocket, even if this is reflected in a reduction in the value of the family business.<\/p>\n Charlotte\u2019s blog reinforces the need for a long-term understanding of the family\u2019s aspirations. Long-term impacts should be factored into any advice. For example, clients often instruct us to assist on share option planning<\/a> and efficiency of external funding. Both of these can result in share capital being owned by non-family members. The long-term aspirations of the family need to be understood given there is a risk that non-family shareholders have an interest in driving the business towards a sale.<\/p>\n Goodman Jones\u2019 tax team are regularly being asked to give advice on the trading status of family businesses. Trading status is important as trading businesses have access to valuable reliefs which provide for efficiency of succession planning. For example, exemption from inheritance tax and the ability to tap into gifting<\/a> reliefs are valuable tools in the family business setting.<\/p>\nTax planning must support the long term aspirations of the family<\/h3>\n
Trading Status of a family business<\/h3>\n
Entrepreneurs\u2019 Relief<\/h3>\n