An estate had been struggling for years to create surpluses for distribution to the beneficiaries of the Trust.
On the surface all was well. The properties were all fully let at market rents; the properties were all in good repair; the agricultural tenancies seemed to have been re-organised; the woodlands had won awards in the past.
The trust was very complicated and suffered from 10 yearly IHT charges. However it did not have the power to make provision for these charges out of income which belonged entirely to the beneficiaries.
As I looked at the estate I could see that the turnover was c400k; in the previous 5 years there had been average losses of 5kpa. Looking below the surface a number of things that stood out.
By making adjustments to expenditure; introducing new management systems; broadening the income generating base; implementing some rent reviews and introducing positive management to the woodlands (which, alone, now generate an average gross income of 40k pa rather than 60k every 5 yrs) the estate started to turn around.
The estate turnover increased to c500k. As such expenditure was reduced and the beneficiaries are now benefit from a surplus of c250kpa.
Working closely with accountancy and legal advisors, a plan is being introduced to amend the terms of the trust. This involves the support of the beneficiaries, and negotiate a Heritage Exemption for IHT purposes with HMRC. This will preserve the estate for future generations and all but eliminate the 10 yearly IHT charge.
“David has been a breath of fresh air: technically superb, a very good communicator and the proof is in our experience of the significant difference he has made to our bottom line.
He spotted opportunities and realised them with tenacity and acumen”
Lord H, Estate owner, South of England