I’ll lay you odds: a penny to a pound. You’d never heard of Dame Zaha Hadid. We’ll see how Dame Zaha’s estate illustrates the possibility of exemption from business inheritance tax.
Before we move on, the reason you should take the mitigation of business inheritance tax seriously is that, every business, irrespective of the composition of the personnel of the firm, notwithstanding the people who actually work in the business, is a family business.
Your memory is sufficiently vivid as to remember the games of the London Olympics. Perhaps because, by several criteria, our participation was a success. Great Britain finished third on the table of medals.
Like most, you saw the events of this seventeen-day, £9.29bn party. Some sophists, persons who have difficult relationships with the truth. They say the Olympics cost £528m less than expected. It’s only charitable to ignore them. You and I have kindness in our hearts, nevertheless, they lie.
They Did it On Water
From these four nations, our youth acquitted themselves with distinction – especially on the water. Several swimming and diving competitors who bore the standard of this then United Kingdom progressed in their events. Several of our youth earned medals.
We thus alight at the London Aquatics Centre, this edifice is one of the few Dame Zaha built on these isles. Zaha Hadid was an architect of note.
There was an elegant individuality to the lady Zaha. Take not my word for it, seek, as an exemplar, her interview with Sarah Montague. When then Miss Hadid set out to be the commander of her soul and captain of her fate, at least professionally, a large architectural practice had 25 people. When her firm took their Christmas break in 2016, the eponymous firm had four hundred souls on its roll.
Business Inheritance Tax: Its Own Reward
For most, the greatest reward of work is the invitation to do further work. Zaha Hadid won the reward of more work. Dame Zaha further earned all the awards: the Stirling, the Pritzker, the Jane Drew, all of them. She was a master of her art.
In 2016, while on holiday, she died, she was 65.
She was the master of her art, no surprise her estate was reported at £67m. No surprise, as she was a star in the architecture firmament. The reports were clear. They were easy to verify. If you’d asked anyone with the requisite knowledge, the inheritance tax due on the estate, you’d have got the response: ‘a maximum of £750,000’.
‘How so?’ you query me. The answer is simple, planning. In my experience, the planning required would have taken about two hours.
A truth universally held is that 65 is a tender age, nonetheless, the lady was prepared. It’s sensible to prepare for all we can foresee in hope for the best.
If she’d died intestate, or without any proper planning, the business inheritance tax on the estate would have been of the order of £27m.
Business Inheritance Tax: Being Prepared
Be you an architect who’s awarded all the trinkets; baubles and trophies to be had, a surgeon of note or journeyman – if you’ve worked hard, you owe a duty to your family. Don’t be fooled by the large sums in this recounting.
You’re merely a custodian of the assets in your name, the ultimate owners are the further generations of your family.
If you own, or expect to inherit a business, you should talk about mitigating or even avoiding business inheritance tax, so we talk about ensuring most of it goes to your family and not to the folk at HMRC.