Readers’ forum: Business inheritance

I act for a husband and wife partnership that owns a freehold commercial site on which are located small industrial units occupied by tenants. The couple are both in their late 70s and suffering with poor health. They have two children in their 40s and 50s who will inherit the whole business and naturally they are concerned about the liability to future inheritance tax. In my opinion there are two proposals to consider: either include both children initially as equal partners or transfer the business to a limited company and then issue shares to the children.

My problem is to decide which proposal will give rise to the least amount of capital gains tax bearing in mind that the business is currently worth about £2m. Transferring assets will have to be by way of gift because the children are not in a position to pay any consideration.

I would be...