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available to buy that share of the business back, your business could be at risk.

How Safe is Your Business? Many people think that protecting a business involves insuring the premises, the contents and the assets. That’s true – it does. But when you think about assets, are you thinking about the material assets only, or are you also thinking about the human assets within the business? It’s the people that make a business run smoothly, and without them most businesses would have a hard time functioning. Just think where your business would be if you were diagnosed with a critical illness, or died. Following the death of a key person, being unable to repay loans can be a serious problem for a business. Corporate debt is an inescapable reality of the business world and business loan protection should be considered. If you’re a partner of a small firm and one of your other partners dies, what happens to your business and their share? Who now owns that share of the business and where does that leave you? In many cases, when a director or partner dies, their share of the business passes to the family, who may not have the same interest in continuing the business that you do. And unless you have the funds immediately

Thomas Carroll Group PLC

t

029 20 86 95 31

Pendragon House, Crescent Road,

e

info@thomas-carroll.co.uk

Caerphilly CF83 1XX

w thomas-carroll.co.uk

Recognising what needs protecting and why 1 In January 2013 Legal & General conducted some research with the Institute of Directors to assess awareness and take-up of business protection amongst small to medium sized businesses. The research identified a business protection gap of £1.35 trillion (an 18% increase since 2011). Legal & General found that:

Almost 3 out of 4 business owners aged under 40 do not have any life insurance cover. For those aged 40 to 49 over 50% didn’t have any cover. 41% of business owners expected their business to fold with 18 months of the death or critical illness of a key person.

50% of businesses had unprotected corporate debt.


6 out of 10 businesses had no protection cover in place to cover the cost of purchasing shares should a business owner die.

peace of mind to family and business partners and ensures that assets go to the desired beneficiaries.

Why Thomas Carroll? Almost a third of business owners don’t have a will. The research concluded that 87% of business owners are positive about their financial future and said they were confident their profits would increase over the next five years. Since Legal & General started their research in 2009 this figure has continued to increase and businesses remain positive about their future. It’s important therefore to ensure that business owners are aware of the potential risks that their business could face in the future and that business protection can help to ensure it can continue trading should the worst happen. As well as protecting your business premises, contents and material assets, there are three other main areas you may wish to consider for business protection:

We have the honour of being named ‘The Chartered Financial Planners of the Year1 by the Personal Finance Society – the body which grants Chartered status to IFA firms and individuals. Our title demonstrates the excellence, commitment to professionalism, training and development of our people which our clients and professional colleagues have come to expect from us. We have recently been awarded Corporate Financial Planning Firm of the Year2 and Retirement Planning Firm of the Year3 by Bankhall Group, the UK’s largest distributor of financial services.

1. Protecting a key person

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2. Protecting a director/partner

If you wish to discuss the content of this brief in more detail please contact Louise Eedy directly on 02920 855 244 or e-mail louise.eedy@thomas-carroll.co.uk

3. Protecting a business loan. Relevant Life Plans are a tax efficient way of providing life cover for directors and employees. The premiums count as an allowable business expense and so can work out much cheaper than a typical life policy. These plans are usually used to provide family protection but in some circumstances they can also be used to meet all business protection needs. Writing a will is a good idea for anyone, but it is especially important if you own your own business. Sorting out a will and any financial affairs helps bring

Thomas Carroll Group PLC

t

029 20 86 95 31

Pendragon House, Crescent Road,

e

info@thomas-carroll.co.uk

Caerphilly CF83 1XX

w thomas-carroll.co.uk

Tax and legislation are liable to change. This information is based on our current understanding of UK law and HM Revenue & Customs practise and legislation we believe may apply in the future. No guarantees are given regarding the effectiveness of any arrangements entered into on the basis of these comments. 1 Awarded by the PFS in 2010 2 Awarded by Bankhall Group in 2012 3. Awarded by Bankhall Group in 2010 and 2011


Ifa brief issue 1 2014  
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