A Family Business Case Study

Many entrepreneurial families build wealth through multiple trading businesses across a range of industries. We worked with a client where the family operated several limited companies, all held within a central group structure, allowing for operational efficiency and strategic oversight.

Over time, these businesses generated strong income streams, with profits extracted through a combination of salaries, dividends, and employer pension contributions. However, the family was acutely aware that these businesses had finite lifespans. As the matriarch and patriarch moved towards retirement and began to exit certain ventures, they recognised that their long term tax position was changing.

Historically, the family’s combined business assets were all seen to be trading assets, and until Labors proposed changes to Business Relief (BR) was unlimited in Inheritance Tax exemptions. However, a further U-turn from Rachel Reeves now presents £2.5 million exemption each from 06th April 2027, (up from £1 million on each death from 6th April 2026 from previous announcements). While this provided valuable Inheritance Tax (IHT) protection during the growth phase, the picture became more complex as the businesses matured.

When trading interests are wound down or sold, families can find themselves no longer fully utilising their available Business Relief. The result is often a substantial increase in exposure to IHT, particularly for families who have intentionally retained wealth within the corporate structure rather than gifting it away.

So it became a clear priority for the heads of the family to retain control and have flexibility.

Generational wealth planning was extremely important to this family. They were very conscious of the scale of their assets and the potential future Inheritance Tax liability to HMRC.

However, they were equally clear about what they didn’t want:

• They did not wish to make outright gifts.
• They did not want to use trust structures that reduced control or imposed irreversible decisions.
• They wanted full flexibility to change direction during their lifetime.

In short, any solution needed to preserve control, choice, and confidence, while still addressing the long term IHT challenge.

Given the family’s net worth and existing holdings, many packaged IHT services were unsuitable.

In particular:

• There was a risk of significant overlap with existing business relievable assets.
• Diversification could be reduced rather than enhanced.
• Off‑the‑shelf approaches failed to reflect the family’s experience, sophistication, and desire for input.

The family needed something more bespoke, aligned with both their balance sheet and their mindset.

The most suitable approach was the use of a Family Trading Company structure.

This solution allowed:

• An initial entry point from £250,000.
• Enhanced functionality and structuring options above £1,000,000.
• A pre‑agreed discretionary investment mandate.
• The ability to complement existing portfolios rather than duplicate them.

Crucially, the family retained the ability to have meaningful input into sectors, and potentially underlying assets, leveraging their own entrepreneurial insight alongside professional management.

This delivered a level of control and transparency that gave them comfort, while still supporting effective long-term estate planning.

This style of solution is particularly well‑suited to:

• Entrepreneurs and business owners.
• Experienced investors.
• Families transitioning from active business ownership into wealth preservation mode.

For those with commercial experience, combining personal insight with a specialist provider can create a powerful and highly aligned outcome.

Please note: This case study is for illustrative purposes only and does not constitute investment advice. Each individual, family, and planning strategy is approached on a fully bespoke basis. This service is not regulated by the FCA and would require additional risks such as investment risk and additional costs – more information available on request.