Business owners: what dies with them

50% Relief Above the Allowance Means a Real IHT Bill Above the allowance, business relief halves rather than vanishes. The arithmetic worked on a three million pound trading firm, not a ten million estate. → A Company Sitting on Cash May Not Qualify for Relief Years of surplus cash on a cautious balance sheet can put business relief at risk. How the wholly or mainly investment test reads against reserves. → A Director Died — but There Are Two of You With a second director alive the company keeps functioning. What changes at the bank, in the quorum and at Companies House, and what carries on unaltered. → A Sole Trade Cannot Be Inherited, Only Its Assets The van, the stock and the money owed can be inherited from a sole trader. The trade itself cannot. What passes to the family, and what simply stops. → A Working-Age Director's Real Odds of Dying This Decade ONS death registrations show what actually kills people in their forties and fifties, and how often. Your honest odds across the decade before your exit. → An LLP Member Dies: Different Rules, Same Panic An LLP survives a member's death, unlike an 1890 partnership. What the members' agreement decides about the share, and the default when it says nothing. → Article 17(2): The Rule That Restarts a Dead Company Article 17(2) of the model articles quoted in full, with the written notice a personal representative serves and who can sign it before probate. → Asset Rich, Cash Poor: Selling the Firm to Pay the Tax A family business worth millions on paper leaves an estate with no cash for the tax. Why the firm gets sold to pay it, and how many estates ever face one. → Business Owner Died Without a Will: Who Ends Up in Charge? No executor named, so authority waits on letters of administration. Who ranks first to apply, and what nobody may lawfully do for the business meanwhile. → Business Partner Died Without a Will: Two Rule Sets Collide Two rule sets collide: the firm dissolves automatically while the share passes under intestacy, and nobody holds authority until administration is granted. → Buying Out a Dead Shareholder When Nobody Has the Cash An agreement to buy a late co-owner's shares is an obligation until the money exists. The three honest sources of the purchase price, set side by side. → Can You Leave a Limited Company in Your Will? You can leave your shares, never the company itself. Why that distinction decides whether the person you name can actually run the business or is blocked. → Can a Sole Trader Have a Relevant Life Policy? No, and the reason is flat: these plans need an employer and an employee, and you are neither. What a self-employed person can arrange in place of one. → Corporation Tax Relief on Premiums Is Not Automatic Broker pages promise the deduction; the wholly and exclusively test makes it a judgement. What an inspector tests, and when the relief can be refused. → Does a Personal Guarantee Die With You? A personal guarantee outlives you and becomes a debt of your estate. How company borrowing reaches the family home in spite of limited liability. → Executors Cannot Distribute Around a Contingent Guarantee A guarantee that may never be called still has to be provided for before anyone inherits. What executors must reserve, and what it does to the timetable. → Fifteen Things to Ask Your Partner About the Business Fifteen questions to ask about his business now: accountant, bank mandate, articles, guarantees, contracts and passwords, while he can still answer them. → How Long Is a Company Paralysed After Its Owner Dies? Published probate timings put weeks, not days, on the gap where nobody can sign for a company. What that stoppage does to wages, suppliers and cash. → How Much Key Person Cover Does a Small Company Need? A sizing method for a small UK company: lost gross profit, loan covenants, recruitment cost and the tax on proceeds that most formulas leave out. → If Key Person Premiums Are Deductible, the Payout Is Taxed HMRC ties the two together: where the premium is allowable, the payout is trading income. What grossing up does to the sum a company genuinely needs. → In a Three-Person Company, the Key Person Is You Key man insurance is written for firms with layers of staff. In a three-person company one death removes the whole operation. What cover has to do instead. → Incorporated Before 2009? Your Articles May Lack the Rescue How to tell whether your company has 2008 model articles, old Table A or bespoke ones, and what a genuinely stuck company has to do about it. → Invoices That Pay After Death: Post-Cessation Receipts Customers still owe money after a self-employed person dies. The final trading period, capital allowances on the van, and post-cessation receipts. → Leaving Shares to a Child Who Cannot Be a Director A sixteen-year-old can hold the shares but cannot run the company. Who votes them, who holds them on trust, and who answers to the other owners. → Life Cover Written in Trust to Pay the Business IHT How money arrives outside the estate before the tax falls due, so the firm need not be sold, and straight talk on how few estates face the bill. → Employer, Employee and Shareholder: Three Hats, Three Answers A sole director is employer, employee and owner at once. Each role needs a different answer, and one generic policy answers none of the three properly. → Low Salary, High Dividends: Does That Limit Your Cover? Directors on a small salary and large dividends fear low cover limits. How insurers count remuneration when most income never reaches a payslip. → My Business Partner Died Written for someone grieving and running a firm at the same time: the four things that genuinely cannot wait this week, and the order to deal with them in. → No Trust, No Tax Advantage: The Relevant Life Catch The payout sits outside the estate only because the plan is in trust. What happens to one set up without it, or with the wrong beneficiaries named. → One Child Runs It, Three Don't: Splitting a Business Fairly One child works in the firm and three do not. How to equalise the estate with money from outside the business so the business itself stays whole. → One Director, One Shareholder, One Death: The Deadlock One person, both roles: nobody left to act for the company and nobody left to appoint. What the family faces, and how ordinary this structure is in the UK. → One Employee Is Too Few for Death in Service Group death in service schemes need several lives, which rules out most one-person companies. The single employer-paid route that is still open to you. → Partnership Act 1890: Death Dissolves the Whole Firm Section 33(1) dissolves the firm automatically on a partner's death unless you agreed otherwise. What that means for a business trading next morning. → Paying Out a Dead Partner's Capital Account How a late partner's share is valued and paid out, plus the statutory election between interest and profits that most surviving partners never hear of. → Payroll Is Due Friday and the Only Director Died Monday Wages are due Friday and the bank mandate died on Monday. RTI filing, PAYE liability and the routes that get staff paid while nobody holds authority. → Pre-emption Clauses: Your Family May Be Forced to Sell A pre-emption clause can force your family to offer your shares to your co-owners, on a fixed timetable, at a formula written when you incorporated. → Too Old for a Relevant Life Plan? Relevant life plans carry a cease age and an upper entry age. What those limits mean if you intend to work into your sixties, and what is left after. → You Have Been Running His Company Since He Died. Are You Liable? Everyone agrees you are taking over, and you still cannot sign anything. The authority gap after an owner dies, how long it lasts, and what you risk. → She Signed as Co-Guarantor. Now She Owes It All. Joint and several liability explained for the widow who signed once, years ago, and is now the only guarantor the bank can pursue for the whole debt. → Telling Four Staff Their Employer Has Died You have become the employer overnight. What has to be said to staff, what must never be promised, and the eight-week clock you are already inside. → The Bank Wants Key Person Cover Before It Lends Your lender has made cover on you a condition of the facility. Who owns the policy, what the bank can ask for, and what happens once the loan clears. → The Company Gets the Money, Not Your Family The company is the beneficiary of key person cover, so the money never reaches your household. Which need that leaves completely unfunded at home, and why. → The Death Clause in a Shareholders Agreement, Line by Line What a death clause should say, line by line, and how it has to line up with the articles and the policy funding it. Lawyers usually cover only two. → The Director's Loan Account Was in Credit When She Died Her company owes the estate money it does not have. Where the family stands as a creditor, and the realistic options for getting the balance repaid. → The First Two Weeks After a Company Owner Dies A fortnight of steps in the order a family meets them: certificate, bank, payroll, insurer, Companies House, appointment, probate. Not in legal order. → The Odds One of Two Partners Dies Before 65 Two partners aged fifty: the joint probability that at least one of you dies within fifteen years, worked from ONS life tables rather than guessed at. → Two Partners, One Death: There Is No Firm Left With two partners there is no continuing firm; it ends the day one of you dies. What the survivor is actually running from that morning onwards. → Two Shareholders, No Agreement, One Funeral A fifty-fifty company with nothing in writing: what the survivor and the estate can each insist on, and what the default articles settle for them. → Two Years of Ownership, or No Relief at All Shares held for eighteen months attract no business relief at all. The two-year clock applied to a real case, including a recent share reorganisation. → What Happens to My Husband's Shares When He Dies? His shares pass to his estate and then to you, and his co-owners will want to buy them. What they can require, and the price nobody has yet agreed. → What Would My Family Actually Receive for the Business? The gap between what you think the firm is worth and what your family could realise without you, and what replaces the income it was meant to provide. → When a Majority Shareholder Dies, Who Votes His Shares? Control follows the shares to the estate, then to a beneficiary with no interest in the firm. What the minority can and cannot do about those votes. → Who Actually Owns the Company Now — Family or Executors? Two transfers get confused as one: shares pass to personal representatives, the directorship passes to nobody. Ownership and control, pulled apart. → Who Pays Redundancy When the Estate Has No Money? Staff are owed redundancy pay and the estate has nothing liquid. The statutory route that exists, and where employees stand while it grinds along. → Who Pays the Partnership's Debts After a Partner Dies? Partnership debts are joint and several, so creditors can look past the firm to the estate. How a family learns that limited liability never applied. → Whole of Life Cover Kills the Key Person Deduction HMRC allows the premium only on term cover with no other benefits, so a surrender value fails the test. Why the policy type decides the deduction. → Why Options, Not an Obligation, Preserve Business Relief A binding obligation to sell your shares on death can cost the estate business relief. Why reciprocal options do the same job without that result. → Why a Relevant Life Premium Is Not a Benefit in Kind The statutory reason the premium stays off your P11D, sourced to ITEPA 2003, and the specific things that would break the treatment on your plan. → You Are the Only Director. Here's What to Change This Week. Five changes a sole director can make this week: check the articles, add a bank signatory, write your wishes down, put shares in the will, arrange cover. → You Left the Company. What Happens to the Policy? Sell up, resign or close down and the employer-paid plan stops with the job. Continuation options, and the cover gap that opens while you arrange them. → My Employer Died. Am I Still Employed? When a sole trader dies the law treats it as a dismissal, not simply the end of a job. What rights that gives staff, and who the claim is made against. → Your Employer Was a Company, Not a Person — That Matters If a director dies your employer still exists; if a sole trader dies it has gone. Which one you worked for changes every right you have as staff. → Your Home Is Security for the Company Overdraft You signed a charge over the house for the company facility. What that exposure is worth at today's prices, and how the debt clears before the estate. →