I am pleased to announce that I have recently had confirmation that I have passed my latest exam. To tell the truth I thought my exam days were over, but I really quite enjoyed the study and the paper I had to write to achieve my pass in the Advanced Certificate in Family Business Advising from STEP (Society of Trust and Estate Planners) – trumpet blown!
Family businesses in the UK employ over 9.5 million people and two thirds of this country’s businesses are family owned. We have a great deal of experience in dealing with family businesses a lot of which comes as a result of the fact that we administer the ultimate family business pension vehicle, the Small Self- Administered Pension Scheme (SSAS).
These schemes are the made to measure Family Business Pension Plan in that the family are trustees, members and also have the facility to use the funds in the scheme to invest into the family business by way of a loan to the company (now referred to as Pension Led Funding but we still call it Loan back) or using the funds to purchase commercial property for the business. The key here is that the family has control over the investment strategy, the membership (family members only) and the level of contributions (within limits set out by our good friends HMRC but we covered that in a previous blog and will no doubt do so again).
In addition to this, the fund can assist with the family’s succession plans in that Mum and Dad can draw their benefits from the pension fund making them less reliant on drawing funds from the business enabling more to be paid to younger family members working in the business, when they probably need it most.
In our dealing with the Family Pension Schemes we have grown into the role of Family Business advisors and developed the soft skills necessary to help families with their future planning. It is not always about the money it is often about how and who is best to take the business forwards and where to have the assets i.e. in the Company or the Pension Fund to help with the future generational planning.
I am probably teaching to the converted in many cases but please feel free to pass the word on to other family businesses that could benefit from the bespoke made to measure pension scheme or who simply have a scheme but are not receiving any proactive advice on what they can do.