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Client Stories... Pete and Keith

Brothers protecting their farming family tradition

Brothers Pete and Keith farm in the Eden Valley, the farm has been in their family since the 1860’s and they inherited from their father, Jack Robinson. They wanted the farm to remain with the family and Pete’s son Tom is the natural choice. He has been working on the farm since he was a teenager and wants to take the business on later in life. Keith’s daughter’s are not interested in the farm so he was concerned what would happen if he were to die, especially if he was to predecease his wife, Anne. How would Tom be able to afford to buy Keith’s share of the farm in order to provide a pot of money for Anne to maybe buy another house?

We were able to advise the family on how they could protect everyone’s interests by placing a life policy in trust, to be used to safeguard the farm for Pete and Tom and buy Anne’s share of the farm. FMB talked them through the many types of protection available and because of our industry knowledge and powerful IT systems we were able to find the best solutions for them.

The Financial Planner also met with Pete and Keith’s accountant to discuss the issue of inheritance tax. The portion of the farm that Tom would eventually inherit was eligible for Agricultural property relief and therefore exempt from Pete’s estate. However rest of the properties and cash that Keith had intended to pass to his daughters was liable to a £60,000 inheritance tax bill. We were able to use flexible trust arrangements and tax efficient investments to mitigate against this hefty tax bill. We also suggested using gifts from income each year to stop the tax liability from increasing.

The brothers were satisfied that by working together as a family with FMB and their accountant, they had not left their children in a position where they would have to sell their homes to pay a tax bill and that the situation was fair to all.

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