The majority of British farms are structured as a partnership between family members. Unfortunately, there is always potential for disagreements and disputes within partnerships, especially with those that both work and live together. therefore, it is important to have a well structured Partnership Agreement which can also provide access to valuable Inheritance Tax Reliefs.
What should you consider?
- Whether to be a General or Limited Partnership
- The age and health of the partners
- How the property and assets are held
- Profit share and loss apportionment
- Issues over direction or control and time dedicated to the business
- Banking and insurance
- The clarity of how to proceed with financial consequences should a dispute occur
- Exit clause, retirement, death, additions of new partners and dissolving the partnership
- Reviewing the agreement every 2-4 years