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Cross Option Agreements

The death of a shareholder can have a devastating impact on a business and surviving shareholders

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It is important for businesses to plan for the future and shareholders should think about what will happen to their shares in the event of a death.  The death of a shareholder can have a devastating impact on a business and its surviving shareholders. Cross Option agreements should be implemented to ensure the surviving shareholders have an option to buy the deceased’s shares at market value and that the deceased’s personal representatives have an option to sell the shares. An insurance policy is also taken out to ensure the sum required to buy the deceased’s shares is readily available.

The use of a Cross Option agreement provides protection to a business and the families of shareholders.  However, it is also a tax efficient method of dealing with shares upon the death of a shareholder. A properly drafted Cross Option agreement will allow the deceased’s shares to qualify for business property relief which is an inheritance tax relief of up to 100%. 

It is essential that the ability to buy the deceased’s shareholding is a right and not an obligation, otherwise the agreement is arguably a contract for sale for inheritance tax purposes and business property relief will not apply.

We recommend you seek the advice of an experienced Wealth Protection lawyer: telephone our team today on 03333 058375 or email WealthProtection@psg.law.co.uk.

Our Wealth Protection team is highly experienced in the area of succession planning for businesses.

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Meet the Team

  • Gareth Williams

    Director, Court of Protection & Wealth Protection

    Gareth Williams

    t:07497 839796

    e: gareth.williams@psg-law.co.uk

  • Nina Sperring

    Partner, Wealth Protection

    Nina Sperring

    t:07301 218133

    e: nina.sperring@psg-law.co.uk

  • Gail Galloway

    Senior Associate, Wealth Protection

    Gail Galloway

    t:07399 781788

    e: gail.galloway@psg-law.co.uk

  • Lydia Palmer

    Legal Assistant, Wealth Protection

    Lydia Palmer

    t:07399 565976

    e: lydia.palmer@psg-law.co.uk

  • Marie Fletcher

    Legal Assistant, Wealth Protection

    Marie Fletcher

    t:07399 803662

    e: marie.fletcher@psg-law.co.uk

  • Suzanna Warburton

    Paralegal. Wealth Protection

    Suzanna Warburton

    t:07946 579067

    e: suzanna.warburton@psg-law.co.uk

  • Alexandra Hales

    Paralegal, Court of Protection & Wealth Protection

    Alexandra Hales

    t:07957 958134

    e: alexandra.hales@psg-law.co.uk

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  • “Gail is my solicitor and has helped me in every stage of my husband’s estate. Because I can no longer write she has simplified things for me and is very approachable whenever I ring, and doesn’t make me feel stupid when I ask stupid questions!” Margaret Borthwick

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  • "Gareth Williams, can give advice to HNW individuals with complex planning needs and also acts as a professional deputy for individuals who have been awarded significant personal injury and medical negligence claims, technically very strong and has a great understanding of the needs of the client and how to provide the appropriate solutions and service." Legal 500

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If you would like to speak with one of our expert lawyers, just call or email using the information below, or complete this form.

call03333 058375 mailinfo@psg-law.co.uk

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