Limited Company, Wills and Death

[Kess]

A cheerful question for a Sunday morning...

I was thinking about finally writing my Will, which should be very straightforward (e.g. leave everything to the wife, or to the children if we both die). However, I wondered if the existence of my limited company demands a more complicated will.

In the event of a contractor's death what happens to their limited company? Is it just treated as another part of their estate - so the executors can arrange to settle any debts, tax, VAT etc. and then close it and pay anything remaining to the beneficiaries - in which case it probably doesn't need any special handling in a Will, or is it more complex? Does any know?

[Clare@InTouch]

The shares you own would be passed to your beneficiaries the same as other assets, and they would then own the company in the same way you do now. They could then close it down in the normal way.

You may want to look into who the company officers are if you want the beneficiary to be able to benefit from Entrepreneurs Relief when the company is dissolved.

Worth talking through with a solicitor re possible Inheritance Tax issues.

[Greg@CapitalCity]

A cheerful question for a Sunday morning...

Very cheerful. No, not complex at all. The executors can arrange for the accountant to prepare final accounts, calculate all outstanding taxes, get them paid, and then distribute any retained earnings in the company to shareholders. Happened to a client of ours several years ago, a 30-something year old contractor - doing the accounts for a deceased person is pretty sad to be fair.

[Kess]

Hi Clare, Greg,

Many thanks for the comments, it sounds a lot more straightforward than I had feared.