Family Partnerships

A Family Partnership can be a useful structure to pass assets along to the next generation in a controlled manner.

Firstly, the Partnership Agreement is tailored to the specific needs & objectives of the Family and is not an ‘off the shelf’ solution.

The Partnership Agreement can have 2 types of shares:

• Equity Shares: The % split of Partnership Assets between Family members

• Voting Shares: So that 1 of the members (usually one of the Parents) has control of the assets and becomes ‘Managing Partner’ with full majority voting rights & therefore control over the funds

The Partnership can then become an investment vehicle for a family and build a diversified portfolio with a long-term time horizon.

The Partnership is usually ‘seeded’ with a Cash Gift from the Parents to the Children. The amount of the Gift would usually be less than the prevailing Group A Threshold. It is also possible for the parents to lend to the Partnership, if say the Partnership needed funds for say buying a Property.

Note that a Family Partnership is a transparent vehicle for tax-purposes i.e. each member is subject to tax on income and gains on a look-through, pro-rata basis.

Note that legal & tax advice is needed to get advice on, and establish, a Family Partnership and Compass Private Wealth does not provide advice on these areas.