Can my mother-in-law pass her business onto me?

lkane0

My mother-in-law is a sole trader, running a B&B. We all live in the B&B house (mother-in-law, me and my husband (her son), and our children).
I have helped in the B&B, and the plan was always that we'd run it together one day.
However, she has cancer and we don't know what may happen so are trying to put plans in place.
Can we simply change the business bank account into my name, and I take over the business, so that bank accounts etc don't freeze & I can seamlessly continue the business if the worst happens?
I wouldn't be able stop trading as we have bookings throughout the year already.
Many thanks in advance for any advice!

trailingspouse

I don't know the answer to your question, but some ideas spring to mind.

Firstly, she needs to make a will asap so that her wishes are known before anything happens to prevent her doing this.

Secondly, is there any reason why your name shouldn't be added to the bank account now, so that you are running it as a joint account.

oldtoolie

Of course you can do all of these things. But this is far to complicated and risky to rely on anonymous advice here.
You really have to see a solicitor even if it costs you.

Mistral001

It is entirely up to her.

paddyrg

I'm with oldtoolie - you will need professional advice or there's at least a dozen things that could trip you up and break business continuity and hence leave you without income. It's worth doing that right now whilst the MIL is able to make clear decisions and state her intentions and can adjust account names etc rather than trying to wrestle it all out of probate, god forbid her time comes early.

antrobus

lkane0 wrote: »

My mother-in-law is a sole trader, running a B&B. We all live in the B&B house (mother-in-law, me and my husband (her son), and our children).....

The real issue would be the property. It must be a big property. It might be worth a few quid. And without the property there is no business. Who owns the property?

Pennywise

Of course it's possible. Anything is possible. What you really should be asking is whether there's going to be tax consequences, i.e. how much tax is due on the "gift", ie implicatons for inheritance tax and capital gains tax. There are "business asset" exemptions for IHT and holdover relief for CGT but that depends on how much of the building is "private" and how much is "business" and how much is "joint use". You need a tax specialist, not just a typical accountant who may not have enough experience. Tax could be zero or could be tens of thousands, depending on exact facts. As said above, you also need the advice of a good solicitor who can advise all parties of the pros and cons of the proposal.

lkane0

Thank you all for advice - and pointing out it could be much more complicated than just changing a name on a business account!
We jointly own the house (as tenants in common), so thought that would make things straightforward.
We have added my name to the bank account, but apparently this won't prevent it being frozen.
I'll speak to a solicitor...

Mojisola

lkane0 wrote: »

Thank you all for advice - and pointing out it could be much more complicated than just changing a name on a business account!
We jointly own the house (as tenants in common), so thought that would make things straightforward.
But perhaps not - I'll speak to a solicitor.

If you own the house as tenants in common, then you each own a part of it. Who is going to inherit the part she owns? Will you need to sell the house to give that person their money?

Savvy_Sue

lkane0 wrote: »

We have added my name to the bank account, but apparently this won't prevent it being frozen.
I'll speak to a solicitor...

As well as a will, it would probably be a good idea if MIL set up a Lasting Power of Attorney, which would enable you / her child / a.n.other to act on her behalf should she lose capacity (or desire) to manage her own affairs. That way a joint account should NOT be frozen.

But yes, professional advice, ASAP. And another question for you to be clear about: what status does the business have? Is it a Ltd Co? Does MIL run it as a sole trader, perhaps employing others? Or is there a formal partnership? each of those situations will have different dynamics and possibilities / limitations in this situation, and there may need to be changes, or even some formalisation!