PLANNING & STRATEGY
Capital Gains Tax (CGT) is a tax on the profit you make when you sell an asset. Careful planning of capital asset disposals to utilise your annual personal CGT allowance is essential to minimise your CGT liability. Our advisors work with you to find the best solutions to manage your asset disposal:
- Reporting via Self-Assessment
- Considering available Reliefs
- Plan around the disposal to minimise tax
Inheritance Tax (IHT) is charged on assets leaving your estate, whether in your lifetime or on your death, but exemptions and reliefs are available.
Simple measures taken to use those reliefs and exemptions can drastically reduce and often eradicate an IHT bill allowing more of your hard earned assets to pass to your loved ones.
When planning effective IHT savings, we give consideration to:
- The use of trusts where appropriate
- Planning in respect of the family home
- Maximising the use of the nil rate band
- Ensuring your Will is tax efficient
- Considering lifetime gifts and annual allowances
- Ensuring pitfalls are avoided e.g. Gift with Reservation of Benefits
- Considering Business and Agricultural Property Relief
It is often the case that a client will require some assistance in determining the tax treatment applying to their specific industry, type of income or specific costs incurred. In such instances we are engaged to prepare a report into the matter which will form the basis of future business decisions.
BUSINESS SUCCESSION PLANNING
For some of our clients, the most important tax issue that they face is the potential tax charges that may be incurred on exiting a business and if the taxes payable will make exiting prohibitively expensive.
We frequently advise on tax efficient ways to exit a business and dispose of the connected assets.
Without careful planning, reliefs can be restricted or even lost. There are also numerous pitfalls around introducing new and removing existing generations from family businesses that can prove very costly.
Our clients were reaching retirement age and wanted to pass the shares in the company to their children, who were now working in the business. The new shareholders did not have enough money to pay the market value for the shares but the company had significant cash reserves. We were able to agree with HMRC that the company would purchase and cancel the shares from the existing shareholders, using the cash reserves of the company. We were also able to ensure only 10% Capital Gains Tax was payable instead of the 32.5% income tax that would have been payable, if they had taken the accumulated profits by way of a dividend.