In this episode of WealthTalk, Christian Rodwell and Kevin Whelan explore the significant upcoming changes to inheritance tax, with a particular focus on business property relief due to take effect in April 2026. They are joined by Omar Aswat, a Chartered Tax Adviser, who explains what these changes mean for business owners and property investors. The discussion highlights a range of tax strategies, the importance of planning ahead, and the potential benefits of family investment companies. The episode reinforces the need for proactive tax planning to reduce the impact of inheritance tax and protect financial security for future generations.
In this episode of WealthTalk, Christian Rodwell is joined by Omar Aswat, Chartered Tax Adviser and founder of ASWATAX, to unpack the urgent changes coming to Business Property Relief (BPR) in April 2026 and what they mean for business owners and property investors. Omar explains how the new BPR limits could expose significant business value to inheritance tax, highlights the practical steps you should be taking now, and delves into strategies like family investment companies, trusts, and smart incorporation. The discussion also covers the impact of Section 24 on landlords, practical tax-saving tips for business owners, and succession planning tools for those looking to future-proof their wealth. Whether you’re scaling a business, building a property portfolio, or planning your exit, this episode is packed with actionable insights to help you stay ahead of the curve.
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Speaker 1 (00:00.142)
New rules will be introduced come April 2026. Only one million pounds of value will be exempt for inheritance tax purposes. Or if I put it differently, business property relief will only be available on one million pounds of value held in a trading company or a trading group. So if you have a business valued at 10 million, one million is exempt, nine million pounds will be subject to inheritance tax at 20%. We have to stop planning from now.
Speaker 1 (00:31.448)
Welcome to this week's episode of WealthTalk. My name is Christian Rodwell, the Membership Director for WealthBuilders, joined today by our founder, Mr. Kevin Whelan. Hi, Kevin.
Chris, good to be with you again. We can't get away from these heavy topics, we?
I know, talking tax today. Well, I searched online because there's quite a lot of quotes, as you might expect from various figures over the years about tax. One that quite tickled me was from Winston Churchill, who said, the art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.
Well, I'm hissing at the minicarist as you can tell. And most business owners and most farmers and most pension owners are hissing mad. But anyway, as always, we have to deal with what's there in front of us and our creativity comes from our ability to react to things positively. So we'll keep it positive and upbeat and you don't get any more positivity when you talk about tax than Omar.
I'll come on to Omar, our guest today in just a second. But before I do that, I'd like to say thank you to everyone who's been sending me and Kevin lovely messages following episode 300 a couple of weeks ago, in particular recent messages from Glyn Wilkinson, Tom Barnes, members of ours. Thank you. And one from Peter Meek, who is an ex-member. We've helped Peter and Joe many years back actually, before they emigrated over to Australia.
Speaker 1 (01:57.634)
and Peter reached out to us, didn't he, Kevin? And that was really nice to receive that message. He said, hi, chaps, just listen to this episode from the other side of the world. And I wanted to say thank you and well done. 300 episodes is amazing. And you guys have been incredibly consistent and added huge value. You have made a massive difference to our lives and those of our family who still have no idea. Looking forward to the new content.
That's interesting though, isn't it? mean, Pete is great and we spent very many good hours with them and I think their long-term plan is to head back. But what was interesting about that comment even, if you just take that little line, the family don't know, is that's kind of part of where I think our focus needs to be in the future is focusing on the wealth of the whole family and that includes a process.
to involve and include the next generation, whether that's up generation, down generation, or side generation, siblings and so on. So we're going to be working hard on that in the coming weeks and months. And also just a quick word, Chris, we've been working hard on the inheritor's tax guide. Huge number of people on that wait list right now. So I want to say thanks to them for me.
to good, right? We've been talking about this for a while, but we are making sure that it's absolutely packed with everything that you need to know around this topic, this big topic, whereby pensions are now going to be included in your estate. So it's really going to have a big impact on inheritance tax. So yeah, if you haven't downloaded that guide, get on the wait list. We'll be sending that out in the coming weeks. And the address to put your name down is wealthbuilders.co.uk forward slash IHT.
Alrighty. So today's guest is Omar Aswat, who is a chartered tax advisor and he's also the founder of Aswatax, which is a specialist tax advisory firm for business owners and property landlords. And he's going to be talking to us about new changes that are coming in April, 2026 around business relief, previously called business property relief. And that is a tax relief, which is offered by the government that allows business assets to be left to beneficiaries free from inheritance when someone passes away.
Speaker 1 (04:11.338)
Omar will have all the details. Time for us to head over to our conversation with Omar as well.
Omar, welcome to WealthTalk today. How are you? Hi, Christian. Yeah, not too bad yourself. How are you doing? Excellent. Thank you. Good to have you on with us today. And we're going to be discussing tax changes and strategies that apply to both property investors and business owners. So let's get straight into this. And you've been sounding the alarm bell about the changes coming to business property relief, which coming in April 2026. So can you explain what's changing and why this matters so much? Sure, Christian. Thanks for the
with an interesting question to begin with. Business property relief, AKA business relief. So different terminology related to the same tax legislation, specifically around inheritance tax. currently, as in if I paint the picture for the audience, business property relief is an exemption from inheritance tax. So currently, and this is the key area business owners need to...
look out for and take active steps to assess the situation is that currently business relief is available on trading companies at a hundred percent. Meaning if the value of a trading company or a trading group is let's say 2 million, 50 million, even a hundred million, whatever value is allocated to this trading company or to a trading group.
It's completely outside one's estate for inheritance tax purposes. Why? Because business property relief is available at 100%. Now, since the budget last year, November 2024, new rules will be introduced come April 2026. So 6th of April, 2026.
Speaker 1 (06:11.038)
Literally over that, and this is the point that I'm trying to make, know, it's for my side, it's more about education awareness and also the fact that they are planning opportunities, structures, strategies that can be explored. And the point is that literally overnight, fifth April to sixth April, twenty twenty six. Only one million pounds of value will be exempt for inheritance tax purposes. Or if I put it differently.
business property relief will only be available on 1 million pounds worth of value held in a trading company or a trading group. So what is the problem here? The problem is that overnight, so let's say an individual or husband and wife or three unconnected shareholders, 50, 25, 25%, whatever they may be, overnight, the whole value of their company, of their business was exempt.
from inheritance tax overnight, a large amount. So if you have a business valued at 10 million or a group valued at 10 million pounds, 1 million is exempt. 9 million pounds will be subject to inheritance tax at 20%. So this is not, I'm not trying to scare your audience. This is reality and we have to start planning from now. As I say, there are structures and strategies that can be explored such as family investment companies.
growth and freezer shares, discretionary trusts, gifting, accelerating potential sale or retirement. It's just case by case basis. And that's effectively the issue that we're looking at currently for many business owners. Thanks for highlighting that. And I think there's still a lot of business owners who might not be aware of this, aren't there? 100%. Sometimes because in the tax field and accountants or within the finance industry, sometimes we think that
Everyone knows, but your roofing business owner, construction business, their day-to-day is completely different. It's up to us as advisors to educate our audience and increase awareness effectively. You mentioned a few different mitigation strategies there. Make sure that we do cover those before the end of this podcast. If I don't ask you the right questions, make sure that you do highlight those before we end. We said today we're going to
Speaker 1 (08:36.802)
you know, talk about traditional business owners, property investors as well. So if someone has a property investment business inside a limited company, how will these changes affect them? Okay, so a property investment business within a limited company is already subject to inheritance tax. So effectively, these changes technically don't benefit them, nor do they help them. Why? Because the business property relief is only available currently.
and following April 2026 on shares in a trading company. So it's important to make the distinction between trading and investment activity. So with HMRC, trading activity enjoys or benefits from more tax relief than investment activity. That's like the default position. And therefore a property investment company doesn't benefit
from much reliefs at all, to be honest, as per tax legislation. So with property investment companies, we've been undertaking this planning for years and years, for decades. Why? Because that's always been within an estate. So the shares in a property investment company has always been within one's estate for inheritance tax purposes. And that's where the whole family investment company, discretionary trust, that's where all that planning comes into play. And what we're doing now effectively
is we're having to pivot slightly and bring those techniques and strategies on board for trading companies as well. Let's stay on this theme then. So when does it actually make sense to move personally held property into a company structure? So this is a common question. It's been very common since changes were introduced in 2017. So many years ago now. But in 2017, there were rules introduced in relation to mortgage interest and how much relief
Property landlords, investors can deduct for income tax purposes. So the rules were phased in over a period of three to four tax years. So since April 2020, property landlords cannot claim a full deduction for the mortgage interest that they are paying. So previously, you have your income, less expenditure, and within that expenditure, you'd have your full mortgage interest amount. So portfolios that are
Speaker 1 (11:03.182)
heavily leveraged, that's an allowable expense. And then you'd have your net profit at the bottom, which is then subject to tax. And you can imagine the change, which is that the mortgage interest was one of the key or most significant expense, right? So now you're having income, less expenditure, which does not include the mortgage interest. So effectively, landlords are being taxed, yeah, are being taxed on higher levels of profits.
than they previously were used to. So what happens there is that when it comes to, but back to your question, when it comes to, you know, when does it make sense to transfer properties held personally into a limited company, that's where we start looking at these kinds of things. So there's four main areas that we look at. And as I say, it's very important to, when it comes to tax advisory, so myself as a chartered tax advisor, for me, it's very important to assess
matters on a case by case basis. So what might work for your friend down the road might not work for you or might not be in your best interest. And that's why we need to undertake comparative calculations. So as our starting step is always comparative calculations, the four main areas that we look at is number one is, you know, are you negatively affected by the section 24 mortgage interest restrictions? That's the
That's the piece of legislation, section 24, mortgage interest restrictions. And over there, we'll undertake a comparative calculation, which is, okay, you're currently paying income tax at 40%, 45%. If we were to incorporate into a limited company, then, you know, we'd save X amount of tax immediately after five years, after 10 years, this is the potential tax savings. We just need to remember that, you know, income or profits within a limited company.
It's still subject to 19 % corporation tax, So it's about the, again, it's case by case basis. And then over here, as in properties held personally, you have no choice but to pay tax on full income and profits, whether you need the income to live on or not. Okay, within a company, a corporate structure, you can effectively shelter profits. So you pay tax on profits, but then you don't need to extract the whole amount.
Speaker 1 (13:26.624)
And you also have the dividend planning that can be looked at, which we'll discuss later on. So that's the first key point. And that's one of the main reasons property landlords that own, you know, five properties, 10 properties, we have some cases, 78 properties, 43 properties, know, large portfolios, they're struggling because of this, section 24 restrictions. Now it's not as straightforward as let's just transfer properties into a limited company, right?
because there are tax implications, namely capital gains tax and stamp duty land tax. So then the next step is, how do we mitigate? Can we mitigate and how do we mitigate the transfer of assets into the limited company without paying significant amounts of capital gains tax and stamp duty land tax? If a portfolio is valued at, let's say, two million pounds and properties were purchased back in the 90s and 2000s, you're sitting on significant capital gains.
And that's where we start looking at certain reliefs, such as section 162 incorporation relief. And again, we have to be very specific. We have to be very clear and we have to be very thorough to ensure the relief applies. Okay. To ensure that HMRC don't come back and start inquiring and okay, what's happened here? And also same with some duty land tax. Again, large property portfolios will need to mitigate. And there are strategies that can potentially be explored when mitigating and potentially
or usually eliminating, that's effectively our work. That's what clients engages for, which is eliminate capital gains tax and stamp duty land tax on that transaction if possible, if and where possible. And the fourth item is inheritance tax, which is very important. I feel like over the years, a lot of accountants, they focused on income tax and capital gains tax, but inheritance tax is a very specialized area. And therefore, because they, many don't have the knowledge or awareness of such tax planning,
or the tax in and of itself, it's sort of been missed out by many. And therefore, inheritance tax is significant. Again, as I say, if we're looking at any portfolio valued at over 2 million pounds, or a million pounds to be fair between husband and wife, we're looking at 40 % on death. And therefore, it's important to strategize from the start. Everything in one sitting is a one-off transaction. The incorporation is a one-off transaction. So it's best to look at all matters.
Speaker 1 (15:49.802)
and plan thoroughly. So we've been helping many landlords. It's something that has to be done thoroughly. with our experience, I'm pretty sure we can assist your audience as well. maybe you can just expand a little bit more on someone who perhaps they're a married couple, they've got a property and the total allowances, because you've got the residence no rate band. So you talked about a million pounds there. Can you just kind of quantify how you get to that figure? Sure. So each individual for inheritance tax purposes,
benefits from a nil rate band. So this is whether you're UK resident or non-UK resident, every individual subject to inheritance tax enjoys £325,000 of the nil rate band. So that's the nil NRB will. Between husband and wife, that's £650,000, £325,000 times two, which is £650,000. know, less than a day, about seven, years ago, the government introduced the residence nil rate band. Now I have personal views around the residence nil rate band.
Effectively, the residence nil rate band is 175,000 pounds per individual. So again, between husband and wife, 175 times two is 350. So 650 plus 350 gives you a million pounds. But the residence nil rate band is only available on the main home that you live in and effectively the home that you pass away in. And that home has to be passed on to direct descendants.
Okay. Now I personally, as in I'm getting a bit technical here, but I don't really agree with the residents in Il-Rei Band because for me it's unfair. It's unfair on those that prefer to rent rather than purchase their own home. And it's also unfair on those that don't have children. Why is it that, okay, it has to go to direct descendants and only then you'll benefit from an extra 175,000? So my view, and when it comes to simplifying tax matters,
It should just be straight 500,000 pounds, nil rate band. But ultimately, that's where we get the one million from. Now, just to be clear, 325,000 pounds was introduced back in 2009, and we're in 2025 now. So that rate has not gone up with inflation. And therefore, what we've seen over the years, and we'll continue to see, is as property prices increase, more and more individuals
Speaker 1 (18:15.37)
married couples, families, estates come within the charge to inheritance tax. Why? Because the 325,000 pounds has remained at that rate since 2009. We'll see what happens in this upcoming budget to be delivered in November, but that's something business owners and property landlords need to be very careful around because as of now, it's not looking ideal, unfortunately. Now, there's many people as well who are curious about family investment companies.
Omar, can you just explain what are they and how can they fit into succession planning as well? In terms of family investment companies, aka FIX, it's a fancy name, but to make it easier for the audience, it's effectively a limited company or an unlimited company. So that's the starting point. The benefits of FIX, and this is why they've become extremely popular. And back in the day, used to be trusts.
Trust were always the go-to and they still are, to be fair. A blended approach is usually what we implement for our clients. But a family investment company effectively is a special company, you could call it, a bespoke company, which allows us to set up the company in such a way where our client or the listener
can do whatever they want to do. So I always say that whenever we work on FIC projects, I always start with a blank piece of paper. It's not for me to tell clients, yes, I do educate in terms of the benefits and the drawbacks as well, but it's for the client to explain their circumstances to me or to my colleagues and for us to then understand your objectives. And what we can do then is
We can effectively set up this company in such a way that meets your objectives or your family's objectives. Key benefits are dividend tax planning. So we're looking at things like alphabet shares, which allows for differential rates of dividends to be paid to different shareholders. Because why the default is, you know, if all shareholders have ordinary class of shares or A shares, whatever it may be, dividends have to be paid out.
Speaker 1 (20:37.792)
in accordance with profits and percentages of shareholders. But with separate classes of shares, we have that flexibility. And this is one of the key benefits of a family investment company, which is flexibility. The second benefit is control. And many parents, grandparents, they enjoy this aspect. Why? Because again, with the share classes, we can set up the structure in such a way where the founding shareholders, which is usually the parents, grandparents,
they remain or retain full control over the direction and the investments of the company. But we've also brought in the younger generation. And that leads on to the third benefit, which is inheritance tax planning and succession, which is now, okay, we've got this property portfolio valued at five million pounds. You we want to start introducing the next generation. We need to look at our inheritance tax problem. So we've bought shareholders in tax efficiently. And that's one of the key
angles that we have to look at as tax advisors, because it's not a straightforward transaction where you just bring children in without paying any tax. The default is capital gains tax and some duty land tax. ultimately now we have shareholders, but we still want to retain control over the direction of the business. And that's where, again, control, flexibility, dividend tax planning, inheritance tax planning, commercial protection within the corporate wrapper compared to assets held personally.
And as I say, a blended approach with trust is quite useful. Why? Because sometimes it might be a case where parents, they don't want to transfer assets directly to their child. Child may be under the age of 18. Child may be, for example, 30 years old, but currently going through marital issues. Or child is, I say child, but you know, adult, but it's their children, you know, 35 years old, going through financial troubles.
potential bankruptcy, divorce. It's a real life situation. It's not something like, you know, my friend down the road, he's advised to set up family investment company for him, so I need to do the same. It's very bespoke. And sometimes I feel like it's just become a bit of a name that just gets thrown around by many. But you have to do things properly. And with us, we'll make sure we've understood clients' objectives to begin with, because it's all nice and fancy.
Speaker 1 (23:02.746)
alphabet shares. Wow. But if nobody knows why, it doesn't make too much sense, right? Trust with family investment companies is a decent approach, but again, case by case basis. that normally a separate company, almost like an umbrella company? So someone's already holding properties in a limited company. Maybe they've got a traditional business as well. So they've got a couple of different limited companies. The family investment company is a new company. Is that how that works normally?
In terms of what we see in practice, it's either a new company, again, depending on circumstances, or an existing investment company can be converted into a family investment company. It's more trickier, but it can be done. And again, that's where we look at the circumstances of the clients whereby they may already own properties within a property investment company. So that's when we sit down and say,
Are we better off and is it cheaper and simpler to convert this PIC, property investment company, into an FIC? It might be there's a trading group at the bottom, subsidiaries, all trading. And then we have a holding company on top, which is the holding company of a trading group. And the client wants to utilize the excess cash within these profitable businesses for property investment purposes. So that's when we have something called a linked investment company, which sits.
as some sort of umbrella top right, okay, which owns shares in the group, but sits separately. And again, that's where the family investment company structure planning needs to be undertaken. As I say though, one of the things that we're looking at is prior to April, 2026, we are converting trading companies now and holding companies of trading groups into family investment companies. Why? Because one of the mechanisms is known as a growth unfreeze the share structure.
And that's where we'd look to freeze the value of one's estate at, you know, one million pounds or two million pounds between a married couple. And then the excess value, that's what we need to plan for.
Speaker 3 (25:09.326)
It's this is
Sorry, Krishna, it might be a bit technical for the audience, but I think I'm pretty sure that, yeah, I hope it's okay. I think you're explaining things in a really, really simple to understand and it is a complicated topic, right? Tax is so personalized, so I don't want to get too into the weeds because as you said, you really need to understand the individual circumstances to be able to...
to advise what's the right thing. But no, clearly you're a man who knows what he's talking about. tell us a little bit more about your journey into tax advisory and why did you set up Aswa Tax? So I've been in the finance industry for over a decade now, in terms of my studies, accounting at college, accounting and finance at university. And I started out as an accountant actually. So I'm a chartered accountant technically. I started out as an accountant, went out on a few audits.
Auditing, I realized, they weren't really my cup of tea. So that's when I sort of pivoted into accounting and tax rather than accounts and audit. And since then, I've just really enjoyed, honestly, I genuinely enjoy the role. Many reasons for this. think one is because as in personally, as an individual, the type of person that needs to be, what's the word, on the go type of thing, which is, the constant changes in legislation. It keeps me thinking. It's not like just the same thing every day. So that keeps me motivated, but also the fact that I...
take satisfaction knowing that we're directly and hopefully positively impacting families' lives, right? Because tax affects each and every one of us. These family investment companies, property transactions, corporate restructures, international tax matters, these are not lighthearted things. These are real life events, real one-off transactions that we're directly advising one.
Speaker 1 (27:01.472)
I find that interesting as well. In terms of Aswa tax, I set up four years ago, so September 2021, exactly four years. Humble beginnings, to be honest, but over the last two years, we've been really helping many, many clients across the board, England, Scotland, Wales, and then international as well. Yeah. Where are you specifically located?
So my primary location is Leicester. We have an office in London as well. And then we also have connections to the Middle East, namely the UAE and Saudi Arabia. Omar, we've talked about property investors quite a bit there. Let's switch to business owners now. You might have covered this partly already, but are there any other smart ways that shareholders of limited companies can reduce their tax bills and keep more profit in their pockets?
Sure. Excellent question. In terms of business owners, we sort of, when it comes to property landlords, we sort of mix in with business owners because what we see a lot of the time is business owners, tend to, know, their business is doing well and then they tend to pivot into something else, which is usually property. But yeah, business owners specifically, what we'd be looking at is things like, I think we always like to start with the basics, okay? Ensure all expenses are being claimed.
You know, we have seen cases where clients come up to us and we review their accounts and tax returns and we've seen their missed expenses that could have been claimed. sometimes it's, well, it's always important to start with the basics and then get more more exotic. Completing the basics is the first step. One angle that I'd like to touch upon is the alphabet share structure again, which allows for dividend tax planning. So for example, if we have husband and wife shareholder.
50-50 in a trading company. That's where we'd look at Alphabet shares, because one party may not need as much income as the other, for example. And that's where we look at salary, dividends, and other remuneration strategies. If we have three unconnected shareholders, for example, definitely we need to be looking at Alphabet shares and also potentially looking at separate linked investment companies. So dividends can go to their own
Speaker 1 (29:13.824)
or each of their individual companies. And that's where they then have their own investments undertaken. One of these shareholders may be married. One of the shareholders has children. One of the shareholders, you know, different risk appetites. They want to do different things. So that's why we have limited investment companies. But yeah, I think the alphabet share structure is very important when it comes to limited companies. Suspension funds, what you guys are specialized in, very important, I think, as you'd probably agree.
It's an underutilized tool, very beneficial. You have the corporation tax benefit, obviously inheritance tax. I think you and Kevin would have spoken about the changes to be introduced in 2027. But yeah, I think again, case by case basis, but alphabet shares are quite useful and remuneration strategy, sorry, which is you shouldn't be stuck at salary and dividends. You should start looking at things like
Okay, if the company owes you money, directors loan accounts, then charge interest on that amount. know, we see some cases where the company owes the director 500,000 pounds, you know, you can charge five, 10 % interest and extract value from the company that way. If the company, if the trading company is using commercial premises that you personally own, again, extract value by charging rent and benefiting from
no national insurance contributions, you have benefits in kind, salary sacrifice schemes, and many other aspects that can be looked at. great, great tips there. Now, lot of business owners, of course, have the dream of eventually selling their business and not as easy as it might be thought. So what types of structures or planning should a business owner be considering if they are thinking about selling their business? The first thing I want to make a comment on is seek advice as early as possible.
The reason I say this is because, again, when it comes to sale of business, it might be that the client is selling his or her business, retiring from his or her business, succession, passing assets to the, passing on shares to the next generation, whatever it may be. The bottom line is there are tax implications that need to be considered. And many of the reliefs that are available for business owners selling,
Speaker 1 (31:36.878)
As I mentioned at the start, have trading versus investment activity, right? And trading activity benefits from certain reliefs. But the thing is certain reliefs have certain conditions attached and many of them are time related. So if, for example, shares have to be held for 24 months, it's very important to just speak to your advisor, speak to your accountant. I'm looking to sell, I might be looking to sell in 2028, for example. Okay. I always have these discussions upfront.
proactively with clients. And that's the only way we're really going to extract that information. We're not going to extract it from looking at the historic accounts. So this conversation is very important. Ultimately, when it comes to exiting a business, there are many different ways. You have your typical third party sales. So are we selling shares in the trading company or are we selling the trade and assets? Now, either has tax implications that need to be looked at. Both have pros and cons. Generally speaking,
Sellers want to sell their shares, but buyers want to just buy the trade and assets. Why? Because they don't want to inherit a dirty company. That's the terminology that's used. Third party sale, that's where you'll have external buyer coming in and due diligence, trying to knock your price down as far as they can and all the back and forth with that. Again, there's tax planning that's available. One specifically comes to mind, which is the substantial shareholding exemption.
which requires a holding company group structure, but effectively you can potentially sell shares in a trading company for 0 % tax, which is extremely beneficial and is a planning tool that we use. When we're looking at retirement or succession, we're looking at company purchase of own shares, there's management buyouts, we can look at acquisition by a new holding company and one that is worth mentioning and becoming more more popular.
is a sale to an employee ownership trust. EOTs were introduced in 2014, Finance Act 2014. And one of the key reasons for its attractiveness, the employee ownership trust, is the fact that sellers can sell for full market value, again, for 0 % capital gains tax. And this is the difference with the substantial shareholding exemption, which I just mentioned.
Speaker 1 (33:59.406)
which is you sell for 0 % capital gains tax and you receive the proceeds in your own hands personally. So with the SSE, the funds are still stuck in a corporate entity. so if, for example, a business owner comes to us and says, you know, I'm looking to sell to the employee ownership trust. And it shouldn't just be the tax advantage that is the motivating factor for this. We should look at, you know, the makeup of the team.
you know, is there management team in place that can actually continue the business and allow the business to continue to thrive? And this is a point that's missed because everyone just says, zero percent capital gains tax. And everyone's just like, yeah, wow, excellent. But the point of the matter is if you undertake this route and the business starts to decline in its profits, for example, then the owner may not be paid out the full
market value. So it's in the owner's own interest as well. But EOTs are very popular. The main reason being that the buyers and sellers are effectively on the same side. You don't have an external party coming in and trying to negotiate this, that, the other. It's all internal. Again, it's a complex transaction. We assist many clients with EOTs, HMRC clearances, the actual step design, the implementation, the valuation. But I think these are the key angles that
business owners should be looking at just very quickly, third party sale, company purchase of own shares, sales to an EOT, management buyouts and acquisition by new holding companies. That's great. And I think you've covered quite a lot for us today, Omar. And it's been really fascinating and interesting hearing you. And I see that you also talked about EOTs on your podcast recently. So just tell our listeners a little bit about your podcast and what are some of the other topics that you've covered.
So yeah, I run the Talking Tax podcast. It's a sort of branch of Aswa Tax. in terms of, yeah, one of the episodes that I recorded was specifically around EOTs. So what I tend to do in terms of the podcast is every odd episode is me just talking, it's an audio episode. So I'm just talking to the audience about very specific topics. I've spoken about EOTs, an introduction to IHT, inheritance tax planning.
Speaker 1 (36:23.648)
accounting entries on corporate restructures, some other areas as well. And then every second or even episode, I introduce guests onto our podcast and then we'll discuss their specialisms. So we've spoken about R &D, tax inquiries and investigations. We look to host someone from WealthBuilders very soon as well, talk about SSAS's and property tax planning, just different matters. But it's called the Talking Tax Podcast. Yeah, that's brilliant. And if someone wants to
get in touch with you Omar, where's the best place for them to head to? We have our website, www.aswatex.co.uk. We're fairly active on social media. So Instagram, TikTok, YouTube, LinkedIn, quite active. I have over 12,000 followers there. So that's my day-to-day sort of posting and ramblings. And email address would be omar at aswatex.co.uk or if it's a more generic email, taxadvisory at aswatex.co.uk.
Absolutely. Make sure that you mention WealthBuilders if you do get in touch with Omar as well. Thanks so much, Omar. It's been a real pleasure speaking with you today. I feel like we'll probably have you back in the future to hone in on one of those specialist areas once again. And of course, maybe post-budget as well, there'll be lots to talk about. Pleasure being on the podcast and much appreciated. And thank you for hosting me. And yes, it's a pleasure. Pleasure to catch up with you.
Speaker 1 (37:48.118)
Okay. Hope you enjoyed that conversation. Lots of stuff to take in there, Kevin, wasn't there?
a lot to take in. And as you said at the beginning, we're talking tax today and he's got his own podcast called Talking Tax, hasn't he? So if you want to tune in, in a more relaxed way, one of the, sometimes, you you get such a lot of good intended content and Omar was very passionate about that, that you need to listen to something twice. So I would say if something just caught you off guard, was, what did he mean by that? Just have a listen to it twice. And if there's anything that we can do that you think could be
important for you to find out about just send a message to HelloAt and we'll either connect you to him or we'll try and answer the question ourselves if it's simple. But you know, one of the key things for me, Chris, you know, I've been, we talked about hissing mad before we listened, you know, and I've been talking about that from inherited tax for pensions. But what Omar was talking about was equally fundamental, which is
People put their life's work into their business. The very fabric of their being is woven into a business. So often they spend all their waking hours thinking about the business and sometimes some of their sleeping hours as well. And they get so enmeshed in their business. would think that if they want to transfer their business onto the next generation, they'd be to do so without any inheritance tax. And it's not really serving business owners well.
take all of this risk if their pensions are going to be treated and tax for inheritance tax and their business as well. And that's a fundamental change, you know, so way back, the relief on selling a business, you know, which was called entrepreneurs relief was 10 million. Now it's a million. The business property relief or the business relief. Why change the name? mean, crumbs is just to serve to confuse us all, but the relief that you get when you
Speaker 2 (39:48.844)
almost transfer the trading entity. It's all about trading. It used to be called transfer going concern. You transfer the business into the hands of the next generation. Should be, and we could argue it should be inheritance tax free, but now that's limited to being tax free at a million. Okay. You get a reduced tax after that at 20 % instead of 40%. But it's still a massive kick in the teeth to business owners. And I think anybody who
wants to exit their business, however they want to exit, whether they want to sell it, they need to pay attention to that. If they want to transfer into or sell it into an EOT, employee ownership trust, we did podcast on that one.
We did. Yeah, way back, episode 103. And I'll link to that episode if you want to find out more about EOTs.
is an interesting way to almost create the sale of your business to a trust. I think the benefit of that, and Omar may well have mentioned it, is both of the participants are on the same side. They're not conflicting, they're not competing, there's no win-lose scenario there. So that's good. Chris Battling was on recently, wasn't he, when he was talking about preparing for exit.
And that was a good listen as well. So maybe you could highlight that one.
Speaker 1 (41:15.522)
Yeah, that was recent. That was episode 295, the exit roadmap, how to sell your business for maximum value. you're right. So Chris Sprattling helps business owners prepare for the sale. And he said, start as early as possible, exactly like Omar, start planning early.
Yeah. And we still think that despite the inheritance tax coming for pensions, there's still a great benefit to transferring and removing corporation tax you're paying now, putting it into a SSAS for a tax-free trust fund. will be another guide, Chris, I keep getting on the guide, writing bandwagon. The 12 benefits that SSAS brings over other pensions, know, some words to that effect, but I'm working on that one now.
I did actually have a meeting with our copyright today on the Inheritor's Tax Guide and that will be on time. It will be ready and we're looking forward to sharing that. So there you go.
Yeah, we are indeed. There might be some people listening to this episode, Kevin, and they're thinking, well, why do I bother? You know, it's just getting so difficult now to build wealth, to build a business. And then at the end of it all, you know, I'm going to have to give it half of it back again. But of course, planning early, of course, is important thing, but it's not too late. So, you know, if you're a bit further down the line and perhaps, you know, you're thinking about...
know, your retirement, your legacy planning, then, you know, get in touch with us because we can have a conversation and we can look at the bigger picture. We're always very holistic in the way that we assess all the assets and perhaps you can just talk about the different aspects of, you know, the structure that we look to make sure that someone's kind of bulletproof from all of these different things.
Speaker 2 (42:55.63)
Yeah, that's a good one. And, you know, I talk to people always. In fact, I had a conversation with a guy today and he said, oh, we talk about inheritance tax. And he was saying, oh yeah, I've talked to, or I've got a list of 20 different tax planners to talk to. And I said, wow, you know, how many have you spoken to? He said, I've spoken to about five or six and I've had a couple of nuggets and basically, know, paraphrasing, said, you're going to have to walk through an awful lot of cowpats.
find a few nuggets and none of that will be holistic. It will all be slanted and angled in some way because anybody you talk to has got to make money from that, usually that silo transaction. Not that I'm brow-beating, casting aspersions of the quality of tax advisors, but everybody's got to make a living somewhere. So the core issues for me, you can imagine, Chris, I know we've got our seven pillars, we've got lots of different IP, but I would ask anybody who is...
in front of a piece of paper now just to imagine a hexagon. And the whole, instead of being a circle, is a series of interconnecting parts that need to be treated respectfully and holistically. Even at the beginning, you don't know the nature of the connection between all of them. And the kind of important ones are tacks, which I think is the most important because it is the most, it's the easiest to deal with.
If you do good planning, you can reduce taxes and there's taxes everywhere. So we can't avoid tax, but we can absolutely minimize them and reduce all that hissing. We can definitely do that. The next one would be legal. Making sure that we've taken good guidance or just good practices really with respect to our legal agreements and legal arrangements in our life and in our business. And so many people don't do that. They don't.
Business owners don't have wheels like my dad and we've told that story before. Powers of attorney, the simple things like having agreements in place in your business, but a bunch of other things that need to be in place. Simple trusts that we talk about, don't we? Life cover trusts, pension trusts, and certainly these are important things. Then when you've done that, you need to look at what other financial arrangements have you got in your life?
Speaker 2 (45:19.544)
Cause anybody who's got a business or anybody who's got any assets, it's got a mix of things. It could be cash, could be investments, could be bonds. could be anything really. Then the next thing is to look at those and to see that they're all harmoniously kind of working together. paying the minimum amount of tax on those things. And there are always new things coming in with response to budgets and so on. having that kind of regularity.
of a holistic review of your finances, good one to look at. Then of course, we need to talk about the importance of building recurring income. And that's where WealthBuilders' IP really shines out, it? And making sure that we're building that well, we're taking time, not just to build value, but to create recurring income. And then of course, wherever we can, we want to use the right structures.
SSAS being a perfect one to have a debate about, you know, get a SSAS working. If you've got a business, the SSAS is going to be so much more powerful for most business owners than any other structure that you could use. Not least on inheritance tax, because you can invite your children to participate in it when they're grown up. And then linking to the fact that we've all, I think if we look at all of our members, Chris, over the years,
And we ask them all for the reason why. It's almost always family. It's almost always linked to the benefits of either spending more time with their family, leaving a better legacy for their family, giving their kids in the next generation a head start. So that family connection is so critical. So leaving a great legacy, but that involves the next generation. It doesn't just pass on money. It involves them in the very act of creating it, which is why
We spend time helping our members create a business in their family's name, what we call the family wealth business. And then when we've completed all of that, we're back to reviewing all that. So it's a constant review around all of these six steps that I think makes a holistic wealth plan robust.
Speaker 1 (47:37.716)
Yeah, very, very good. And if that's something you'd like to chat to us about, send us an email. Open your phone right now. Just send an email to hello at wealthbuilders.co.uk and just say you've been listening to the podcast, you've heard Kevin explain.
how to become financially bulletproof, create this fortress around you, impenetrable with all of those elements Kevin just explained. And yeah, we'd be more than happy to have a chat with you and just understand your circumstances. So thank you once again to Omar for sharing all of his insights with us today. And don't forget to go and pop your name on the inheritance guide waitlist, wealthbuilders.co.uk forward slash IHT. And Kevin, you and I will be back same time, same place next week.
Yeah, we will. And by the way, did meet, we had a meeting of around about 80 of us recently in Nottingham, looking at a business there that has bought a sort of beautiful building with a restaurant and so on. And we got lots of learnings and lots of connections, including one of our younger members who called me a wealth dad, which just made me feel old. Quick shout out to Hazel for that. But I've got a guy who makes me laugh a lot.
I like sparing time with him and he's also being guided by Chris Battling. His name's Stuart. He always takes the P at me for football, right? But he's a Man United fan. So I had a little chance to have a go at him. But anyway, so we had lunch together and I enjoyed his company. And he always goes, until next time then Kev, see ya. I'm going to let Stuart sound us out. So Stuart, until next time, my friend, see ya.
Speaker 2 (49:17.88)
We hope you enjoy today's episode. Don't forget that we are constantly updating our resources inside the WealthBuilders membership site to help you create, build and protect your wealth. Head over to wealthbuilders.co.uk slash membership right now for free access. That's wealthbuilders.co.uk slash membership.