Tax Efficient Remuneration Strategies
We have solutions for tax efficient remuneration packages for directors, shareholders, executives and key employees of successful privately owned companies.
We have a variety of solutions for business owners and their employees wishing to reduce the tax liability on extraction of funds from their business, and, like all planning, the option which is most suitable depends very much on their risk profile of the individuals.
Types of planning includes the utilization of:
- Bonus vs Dividends
- Pensions planning
- Profit extraction techniques combined with EIS/SEIS/VCT investments to reduce taxation
- Company share buybacks
- Company purchase of own shares
- Corporate Investment Opportunities utilizing statutory R&D reliefs.
- Tax efficient structuring of Business Owners/Directors’ duties, responsibilities & contracts with their company.
- Tax efficient methods to clear or reduce overdrawn Directors Loan accounts
Income Tax Planning
Income tax planning is primarily concerned with reducing Income tax at the higher rates of 40% and 45%.
There are a vast array of Income Tax products available on the market including:
- Aggressive esoteric planning
- Tax incentivised Investments
- HMRC approved plans such as:
- Enterprise Investment Schemes (EIS)
- Recent Seed Enterprise Investment Schemes (SEIS)
- Venture Capital Trusts (VCT)
- Pension Contributions
Our preferred route for Income tax planning is to structure the client’s affairs, using an array of HMRC approved and bespoke structures, to reduce exposure to taxation without incurring the delays and risks associated with aggressive planning.
In order to provide suitable advice on income tax planning, we will need to discuss the client’s attitude to risk, time horizons and any existing planning that may be in place. Once a thorough review is complete, we will provide an array of income tax planning options to suit the specific requirements.
Inheritance tax planning
Inheritance tax planning has become imperative in recent years. With property price rises and an increase in home-ownership, a large proportion of UK domiciled individuals will be exposed to inheritance tax (IHT) levied on their estates upon death.
Inheritance Tax is probably the easiest of all tax to reduce, or even mitigate entirely, with good planning and with very little cost.
Our various partners have several effective strategies to eliminate this tax completely, whilst still enabling individuals to have control and ownership of their estate.
This may include:
- The use of Business Property Relief (BPR) with a two year qualifying period. There are several investments available which can take advantage of this IHT free HMRC relief.
- Trust planning. By wrapping assets into a suitable trust, it may be possible to substantially reduce the part of the estate liable to IHT life assurance plans. Whilst not entirely avoiding IHT, this approach allows individuals to manage the liability. We are able to give advice on a range of life assurances to suit the cover required.
- Bespoke personal solutions.
One of the main problems with Inheritance Tax Planning is timing. Whilst the circumstances surrounding death are distressing, meaning that money issues are the last thing on our minds, however careful planning at the critical stages towards the end of someone’s life can preserve enormous wealth for future generations.
With this in mind, we have a solution that allows the individual or couple to maintain control of their assets whilst structuring them in such a manner that they can pass them onto beneficiaries after death in a tax efficient manner.
Bespoke Tax Planning and Business Re-organisations
Bespoke planning options we can assist with are:-
- Business Re-organisations
- Business Incorporations
- Property portfolio planning
- Schools & University fee planning
- Employee Share Scheme’s
- Entrepreneurs Relief Planning
- Tax-efficient disposal of company shares
- Offshore structures
At Ascendis Tax we are specialists in the process of restructuring existing businesses into more tax efficient structures.
From time to time, and for a variety of reasons, businesses may find it beneficial to be re-structured. We’re able to provide input and advice on what the tax implications of such planning will be, and how these can be done more tax efficiently.
We conduct a thorough tax due diligence and then make suggestions to re-organise your business and tax affairs to suit your cases individual circumstances.
Where we differ to most tax specialists is that we’re able to call upon all of our experts, creating a holistic approach.
The current regime for the taxation of limited companies is such that there are tax advantages to be gained from running your business through a limited company.
We have vast experience of and success in the process of incorporating existing Sole Trader or Partnership businesses into new Limited companies, whilst obtaining significant business and personal taxation savings for their owners.
We also work very closely with various offshore companies and can assist with setting up extremely tax efficient offshore structures.
Another typical situation we come across is one where a company is seeking to transfer an element of its trading business into a new entity to perhaps ring fence its commercial exposure.
In this sort of scenario we’re able to bring along our corporate tax expert as well as our VAT and Law specialists. They provide advice across all aspects of the structuring to ensure that all elements of the project are considered.
Capital Gains Tax Planning
There are a number of strategies that have been developed to assist with Capital Gains Tax (CGT) and to deal with any type of asset you intent to dispose of.
We can advise on the capital gains tax implications of:
- quoted and unquoted share disposals
- business disposal
- sales and gifts of property
- the availability of ‘Entrepreneur’s Relief’ in relation to business assets
- the availability of reliefs on gifts to individuals and trusts
CGT is an area that requires careful forward planning. We believe artificial transactions to generate capital losses will not have the desired effect because of general anti-avoidance legislation which specifically prohibit this. Subsequently we believe the most effective manner in which to plan for CGT, is to enact any planning prior to disposal or even before an investment is made.
We have a number of solutions for CGT, ranging from wrapping the assets at purchase within a tax efficient structure, through to converting gains into tax free distributions. How this is done will depend on the asset, timeframe and attitude to risk.
We have also advised a number of business owners who were looking to sell their companies in a tax efficient manner.