Setting up family partnerships
A family partnership is a legal entity and is typically used as a way for parents to share assets with their children during their lifetime. Under this arrangement, all parties to the agreement are ‘partners’, and as such, all retain a common interest in the shared assets.
Lavelle Partners have been assisting Irish families with partnerships for over 30 years, helping to protect their mutual interests, handling any issues, queries, or changes which arise, and dissolution of the partnership once its original purpose is served.
What is the benefit of a family partnership?
There are numerous reasons why so many families enter into family partnerships in Ireland. The headline benefit is that it affords the ability to transfer assets from parents to children but only to pay tax at today’s rate, while retaining some control over those assets. And when it comes time for the children to take full control of the assets within the trust, no further tax should be payable. Parents will typically transfer assets during the life of the partnership which they believe will increase in value over time.
Under such schemes, parents will usually only retain a small proportion of the share of the assets in the partnership, with the children holding the majority.
The overall tax burden under a family partnerships should be much lower than outside of such arrangements, however, in order to achieve taxation benefits it is important to take advantage of the full Capital Acquisitions Tax threshold available to each partner, and if gifting cash, purchasing investment property, and managing rental property under the partnership, this needs to be done with a full understanding of the latest family partnership tax implications. Lavelle Partners estate planning Solicitors can advise on all such matters.
What is a family partnership agreement?
A partnership agreement is a legal document which outlines the terms of a family partnership. It is vital to ensure this is drafted by a lawyer specialising in estate planning matters, as failure to include the necessary provisions may render it invalid, and lead to future disputes.
There are two primary family partnership types:
Limited partnership – rather like a limited company, the liability of any one partner is capped at the amount they have themselves contributed to the partnership.
General partnership – there is no limit on the liability of partners, and personal assets are not protected.
While a limited partnership has distinct advantages in respect of liability, it does require the filing of annual accounts, whereas a general partnership does not.
Why choose Lavelle Partners to assist you in setting up a family partnership?
- We are a partner-led firm, meaning the partner you meet will manage your case and be available to you if you have any questions.
- Our clients remain with us long-term and most of our new clients come to us via referrals. In addition, most team members have been with the firm for 15-30 years. We know our clients, their families, and their businesses inside out and this helps us provide exceptional service and gives people confidence in the quality of the advice and representation they receive.
- Our advice is to the point; we will not ask you to choose between five different options, we will advise which one will protect and promote your best interests.
- When it comes to family partnerships and inheritance matters, we are sensitive and compassionate in all our dealings.
- Our head of property, Nicola Walsh, holds a Diploma in Trust and Estate Planning (Law Society and STEP) 2004
For further information regarding setting up a family partnership in Ireland, please contact Lavelle Partners in confidence on (01) 644 5800.