Helping a hospitality business in Cornwall secure its future

The challenge

Succession planning is one of the most important decisions a family business can make. Done well, it protects a legacy, preserves family wealth and gives the next generation a clear path forward.

A long-established hospitality business in Cornwall faced exactly this challenge.

The founder owned 100% of the business and had spent many years building a successful hospitality operation. Family members were becoming increasingly involved in running the business, but ownership remained with one individual.

When changes to inheritance tax (IHT) brought succession into sharper focus, the family decided it was time to act.

They needed a plan that would:

• Reduce future inheritance tax exposure
• Transfer ownership to the next generation
• Protect the long-term future of the business
• Provide job security for staff
• Create long term career opportunities for the staff

Adding to the complexity, the hospitality business operated both hotel accommodation and self-catering properties, creating several technical tax considerations.

Our approach

The family turned to PKF Francis Clark for specialist advice.

Having worked with the business for a number of years, partner Tom Roach already had a strong understanding of the company’s history, structure and future ambitions.

Working alongside the family’s adviser and legal team, we developed a succession strategy designed to meet both commercial and personal objectives.

Our support included:

• Reviewing the value of the business and assessing potential inheritance tax exposure
• Reviewing existing inheritance tax planning arrangements
• Exploring options for transferring ownership
• Providing specialist tax advice on complex technical issues
• Coordinating input from valuation, tax and legal specialists
• Supporting the implementation of the agreed strategy

Throughout the process, our team challenged assumptions, gathered evidence and tested potential risks to ensure the proposed structure was robust and defensible in relation to the IHT rules.

Delivering clarity and confidence

One of the key challenges involved demonstrating that both hotel accommodation and self-catering properties formed part of a single trading business.

This was a critical point in securing the desired tax treatment.

Our succession specialists worked closely with the family and their adviser to review the business model, gather supporting evidence and build a clear technical position.

By bringing together expertise from across PKF Francis Clark, we were able to provide joined-up advice and a clear route forward.

The outcome

The project resulted in a significant transfer of ownership to the next generation and marked a major milestone in the family’s succession journey.

The business now benefits from:

• A clear succession strategy
• Greater confidence around future ownership
• Reduced exposure to future inheritance tax liabilities
• Increased involvement from the next generation
• A stronger platform for long-term growth

Most importantly, the family has taken a proactive step towards preserving both the business and its legacy for future generations.

What the client said

An adviser to the family who worked alongside PKF Francis Clark, said:

“PKF Francis Clark helped us understand the size of the issue, explore the options and put a solution in place.

There were a number of technical points to work through, but the team never took shortcuts. They challenged us when they needed more information and made sure everything was properly evidenced.

Tom Roach played a key role throughout the project. He brought together specialists from different areas and made sure everyone stayed focused on the same objective.

The advice was practical, thorough and easy to follow. I would have no hesitation in recommending PKF Francis Clark to other businesses facing similar succession challenges.”

Advice for other family businesses

Based on his experience, there are several steps business owners should consider when planning for succession.

1. Start planning sooner than you think

Many family businesses delay succession planning until a tax change, retirement plan or unexpected event forces action.

Starting early creates more options and allows time to make informed decisions.

2. Seek specialist advice early

Succession planning often involves tax, legal and family considerations. Taking advice at an early stage can help identify risks and opportunities before they become problems.

3. Involve the next generation

Successful succession planning relies on open conversations. Future owners should understand the responsibilities involved and have an opportunity to shape the future direction of the business.

4. Look beyond tax

Tax planning is important, but succession is about much more than reducing liabilities.

The strongest plans also address leadership, governance, ownership structures and long-term business objectives.

How PKF Francis Clark can help

Every family business is different. Whether you are beginning to think about succession or are ready to take action, our succession specialists can help you create a plan that protects your business, your wealth and your family’s future.

Talk to our team about how we can help you navigate succession planning with confidence.