The birth of Alice, my first granddaughter in September had me thinking about the best way to support her in the future. Whether it is small gifts, regular savings or larger amounts to help with university fees, a deposit for a home or the cost of a wedding then it could have Inheritance Tax (IHT) implications.

There is an IHT annual exemption which means you can give up to £3,000 per tax year. If you did not “gift” any money the previous year this can be carried forward, enabling you to give £6,000 free from IHT. Any gifts over this amount will only be free from IHT provided that you survive more than seven years.

The seven year survival rule also applies to any money over £3,000 put into a trust that the grandchild can access once they are 18 years of age.

In addition there is a small gifts allowance which enables you to give gifts of up to £250 per recipient free from IHT each year.

Another option is to open a savings account in the grandchild’s name. The interest earned on this account will be tax free. Obviously the greater the amount invested the greater the tax saving.

Alternatively the grandparent can pay into a Junior ISA. Whilst the grandparent cannot open the account you can make contributions up to the annual tax free limit of £4,060. This money cannot be accessed until the grandchild is aged 18 so it should help with college fees, etc.

Given that all these exemptions exist it seems only sensible to plan ahead and to ensure that you are not caught by an IHT liability when it was not necessary.

If an accident or ill health prevents you from running your business, what happens?

There are no automatic rights for partners or spouses to take over the running of a business and if there is just a single company director then the bank’s automatic response will be to freeze the bank account. This can have a catastrophic effect on the business if you are unable to pay staff or suppliers.

The solution is to set up a commercial Lasting Power of Attorney (LPA). An LPA can cover both your personal and business affairs but can be restricted to just the running of the business. Ideally the person appointed should be someone you trust with some knowledge of the business so that it can continue operating. The LPA can be revoked at any time.

Whilst it is only natural to hope that it will never be needed we recommend that this should be considered in order to give you and your family peace of mind.

If you think that this may affect you then please contact us to arrange a free consultation about setting up a commercial Lasting Power of Attorney.

When starting a new business, the shareholders are hopefully in agreement about what they want to achieve and how the business should operate. This is fine but things change and shareholders can find they want different things.

So where there is more than one shareholder, we recommend a Shareholder Agreement is put in place which sets out individual responsibilities, how decisions are to be made and how disagreements are to be resolved should there be a stalemate.

Sadly disagreements between shareholders can escalate and harm the prospects of the business so it is better to have the agreement in place before any problems arise and whilst the shareholders agree..

Howell & Co work closely with Edward Hands and Lewis Solicitors whose commercial department are experts at drafting such agreements. If you would like further advice, please contact us.