Worst case scenario
A firm of solicitors advised a director on the sale of some shares. Three weeks later he died during a heart operation – he was in poor health, but the procedure was considered routine. The problem was this: the shares would have been completely free of inheritance tax if he had still owned them, but now he had cash, which hugely increased his estate’s IHT bill. The daughters sued the solicitors for bad advice.
The court decided that the lawyers couldn’t be blamed. They hadn’t been asked to comment on the possible consequences of the director’s death, and they hadn’t been given any reason to suppose it was imminent. There are things that could have been done to minimise the risks, and maybe they should have suggested them – but that was above what the law required, and they had not been negligent.
If you are thinking about selling up your business and retiring, the sudden exposure to IHT is something to take into account – particularly if your health is not the best. We can advise you on the steps you can take to protect your assets.