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Income Tax Planning

Our clients were running a very successful farming partnership. Profits were regularly in excess of £100,000 per partner and they were paying the highest rates of Income Tax. They were keen to reduce their overall tax burden but could not put any more cash into their pension fund as it had reached the lifetime limit.

How we helped our client
Following a thorough review of the commercial considerations, the clients’ business was transferred to a limited company. This was done with no immediate Capital Gains Tax payable as hold over relief was claimed on the transfer of the land to the company. No Land and Buildings Transaction Tax (LBTT) was payable as the business could make use of the provisions applying to partnerships. Our client could then benefit from a much lower rate of corporation tax on the business profits and only pay income tax on the money they actually needed to withdraw for spending. This was withdrawn as a combination of salary and dividends to mitigate the NIC payable.

For more information or to discuss further, please contact the Private Client Taxperts.

 

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