Tax Planning

Moving personal buy to let property portfolios into limited companies

In many cases, we can avoid CGT on the transfer and we can significantly reduce the SDLT to a manageable level. The advantages are lower rates of tax on income retained in the business, avoiding the restrictions on deducting mortgage interest and a tax-free uplift in the capital gains base costs of the properties.

Enterprise Management Incentive (EMI) share option schemes

These have always been useful but are becoming more popular as a tax-efficient way of rewarding senior management as and when there is a future sale or flotation of a company.

Establishing investments within a trading group

As profit extraction schemes tend to be in the risky area of tax avoidance schemes, we question whether company profits need to be extracted at all. In many cases, the profits are used to make investments. We have been assisting companies with accepting a 19% Corporation Tax charge and setting up a structure to use post-tax profits as the seed capital for property and other investments, rather than trying to extract and invest personally.

Inheritance tax planning

We often find that, if we ask clients for their wills, they don’t exist, are old or have been drafted by people who are not experts in Inheritance Tax. We have identified one case where a wealthy lady was going to leave a large share of her estate to her even wealthier daughter rather than going into trust for the family as a whole. Apart form avoiding a double dose of Inheritance Tax, the use of a trust in a will permits much greater sums to be available for school fee planning.

We have also seen two cases where an elderly person can happily give away a half share in the home to an adult child but avoiding gift with reservation problems.