Background

Mr Martin aged 34 owner of an accountancy software sales business and co-owner, Mr Aaron, a successful entrepreneur with several business interests aged 51.

Challenges

1. Mr Aaron wants to ensure that the business can still function in the event of Mr Martin’s death or incapacity
2. Each client wanted to be able to buy the shares of the other, in the event of their death or incapacity
3. Clients need to provide death in service cover under TUPE regulations for the workforce of an acquired company
4. 4) The company had to establish a designated stakeholder pension scheme for its employees

What we did

1. Arranged key man insurance on the life of Mr Martin to provide £100k in the event of his death or incapacity
2. Arranged shareholder protection policies on each client to cater for the terms of their shareholder agreement
3. Put in place a death in service scheme for the firms employees providing cover of 2 x each employees annual salary in the event of death
4. Established a designated stakeholder pension scheme to comply with their legal obligations

The results

• Funds are now available for Mr Aaron to replace Mr Martin, should the latter die or become incapacitated, ensuring the firm can continue to operate profitably
• Each shareholder now knows he will have funds available to purchase the shares of a deceased shareholder
• They also have the peace of mind of knowing that their dependants will receive the value of their share of the business
• This has been achieved without any Corporation Tax liability on the company, or any Income Tax, Capital Gains Tax, or Inheritance Tax falling upon the shareholders or their dependants