Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.
May I confirm whether the beneficiaries have agreed a "price" for the company to buy out their interests to date please or is this component still to be agreed?
I meant to say the widow received: The first 250,000 plus 'life interest' in half of the remainder.
The life interest in half of the remainder is in the form of shares in a trust.
We have all agreed to dissolve (trustee and beneficiaries)
Fathers wife and myself and two sisters
The company shares were originally valued at £2000 per share
but the company has suffered losses over the last 2 years
therefore we have provisionally agreed a per share price at £1000 per share
this has been offered by the company and fathers wife and we as trustees are willing to accept
let me know if you have any more questions.
Thanks. For the avoidance of doubt this is presumably a company that your father controlled as opposed to a publicly listed company?
yes Private limited company
295 in trust to which his widow receives life interest from
however she is willing to dissolve and the company will buy the shares from the beneficiaries (myself and two sisters)
Essentially I want to know if its possible to dissolve the trust and for the company to buy the shares if all parties are in agreement and a high level description of what needs to be done to make it happen.
(all parties have agreed to this by the way)
Thanks. it is perfectly possible to break the life interest trust providing all the beneficiaries under the trust are willing to agree which from what you say is the case here
what is required is first of all the beneficiaries of life trust to agree a price for the surrender of their life interest in the asset(s) and then for a legal document to be prepared to surrender their interest.
In terms of agreeing a price, from what you say, this has largely already been completed however you may wish to look at the The intestate Succession (Interest and Capitalisation) (amendment) Order 2008 which provides an actuary table prepared by the government in order to assist beneficiaries in calculating the value of their life interest in a particular asset. It is not a requirement to use the table but it can provide at least a useful basis for negotiations to begin author confirmation that the price you have agreed is in the right ballpark
ok, so we can get a family solicitor to prepare these documents
no court judgement for instance is required?
having agreed a figure, providing all beneficiaries are adults and not minors, a solicitor will need to be instructed to prepare a deed of appointment appointing out the life interest assets to the company shareholders who have agreed to purchase them at the cash to be paid to the beneficiaries. The deed will wind up the trust and bring it to an end. There may be a capital gain to pay though only if the asset has increased in value which from what you say is not the case
local judgement is required unless any of the beneficiaries are children
Sorry correction "NO judgement is required unless any of the beneficiaries are children"
Voice recognition software malfunction. Apologies.
thanks for your help Kind Sir
following completion of the deed of appointment, and any capital gains tax that may be payable, the beneficiaries receive cash and company shareholders receive the trust assets absolutely and both parties go their separate ways so to speak.
A pleasure. Have I been able to help you with all your questions on the above?
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I will do thanks again
Many thanks. Best wishes