Succession Planning

The issue

Two longstanding shareholders/directors wished to take a step back from their business and provide their management team with an opportunity to take over the company. The company had traded successfully for a number of years and had an established holding company structure in place.

The holding company owned two properties and the retiring shareholders wished to retain ownership of these. However, they also wished to benefit from entrepreneurs relief in respect of their disposal of the trading company.

The solution

A restructuring exercise was undertaken (with the benefit of advance clearance from HM Revenue and Customs) to change the holding company structure whereby the individual shareholders owned shares in both the holding company and the trading company. As such, after a period of time, the retiring shareholders were able to dispose of their shares in the trading company with the benefit of entrepreneurs relief whilst retaining their ownership of the properties.