good Morning
I am a regular reader of this forum but have not posted before. However my father is currently looking at his estate planning and I would welcome some advice.
My father owns a small amount of land that would be close to/possibly slightly below the IHT threshold at current valuations. He has rented the land out for the past 10 plus years to an organisation that he has personal ties to. For health reasons he wants to tranfer all assets out of his name to his three children, however the tenant has expressed concerns about the land being split into smaller packages (through a will etc) with potentially three separate landlords. Due to the personal financial situation of one of my siblings, my father does not want to gift any assets directly to him but does want to ensure that he will benefit longterm.
What we are considering doing is incorporating an LLP with the three children as partners and my father gifting the land to the LLP. The LLP will recive the rent and my father will continue to manage the relationship with the tenant for which he will recive a small management fee from the LLP.
From a income tax perspective I know the children will then have to complete tax returns declaring thier share of the net income of the LLP, the LLP will need to complete a return and my father will declare the management fee received on his return.
From an IHT perspective I am not sure what the implications are. I know that if the transfer was made to the children individually it would have been a PET but my understanding is that this will not apply to an LLP?
Essentially we want to transfer land out of my fathers name into the childrens collective ownership (this is important). Apologies if I am over complicating things but grateful for any advice.
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