Tax Planning
Tax Planning
Our partner-led service delivers practical and tax efficient solutions. We are able to deliver innovative solutions through an open dialogue with our clients. We invest time, up front, so as to understand fully our clients’ needs. We listen to our clients, so that, in partnership, we create the plan to achieve their goals.
Equally important to initial planning, is adapting the strategy to future changes. Tax planning for us is not a one-off exercise, but a continual process.
Business Sale and Retirement
The flat rate capital gains tax charge is 28% for higher rate tax payers and 18% for others. The principle reduction available is known as ‘entrepreneurs’ relief’, under which £5 million of capital gains is effectively taxed at a rate of 10%, rather than 28% or 18%.
The key features of the relief include:
- it is a lifetime allowance of £5 million, so that gains realised at different times may be eligible for relief;
- it applies only to individuals;
- the disposal must represent a material disposal of an interest in a business;
- for shares, the individual must own 5% and be an employee/officer and it must be a trading company or group;
- the asset must have been held for a minimum of 1 year.
As with all tax planning, care must be taken to ensure that ‘entrepreneurs’ relief’ is available.
Business Purchase
Your principal decision is whether to purchase assets or shares. The tax position is very different and the correct decision will be guided by the objectives of your purchase and your existing tax profile.
If the company is to be purchased using future profits, then the tax and legal consequences of deferred consideration have to be considered.
Research and Development Tax Relief
Research and development tax relief can be applied in a surprisingly large number of cases. The corporation tax relief is 175% of monies spent. We assist our clients in establishing eligibility, the basis for the claim and recording the supporting data.
Pre Year End Tax Planning Meeting
We offer a pre year end tax planning meeting to all clients. The scope of the meeting is dictated by our client’s circumstances, but it can range from the forthcoming year end to retirement in 15 years.
We use our wide experience to ensure that future business developments take advantage of tax breaks.
Capital Gains Tax
Planning for a business sale must start early to give the most effective solutions. With the right offer, most business owners would sell tomorrow, so the time to start planning is now.
The flat rate capital gains tax charge is 28% for higher rate tax payers and 18% for others. The principle reduction available is known as ‘entrepreneurs’ relief’, under which £5 million of capital gains is effectively taxed at a rate of 10%, rather than 28% or 18%.
The key features of the relief include:
- it is a lifetime allowance of £5 million, so that gains realised at different times may be eligible for relief;
- it applies only to individuals;
- the disposal must represent a ‘material’ disposal; for shares,
- the individual must own 5% and be an employee/officer and it must be a trading company or group;
- the asset must have been held for a minimum of 1 year.
As with all tax planning, care must be taken to ensure that ‘entrepreneurs’ relief’ is available.
If you hold non business assets, such as a second home or a holiday home, there are fewer reliefs to minimise tax, but timing of disposal is an important tool to minimise and delay tax.
