TAX PLANNING TECHNIQUES

While we do our best to make everyone aware of all the tax planning techniques that may be of interest to them, it is not always possible. Therefore we thought it would be useful to summarise some of the ways that we can offer you to save tax.

Latent Gains
If your company is sitting with an investment asset which it wants to dispose of but faces a hefty tax bill in doing so then we can offer a solution which allows the asset to be taken out of the company tax free into an offshore structure where the asset can be sold tax free. We can then allow the shareholders to personally access that cash either tax free or for a minimal cost of under 3%.

Property Development
If your business is land development we can offer a structure based in the Isle Of Man. If the business is
run through a limited company to sell the land etc. the company will face its own tax bill at either 30 or 33%. As a shareholder you then have a personal tax bill to pay to get your hands on that tax paid profit with a combined tax rate of around 48%. Our planning reduces the overall tax bill to around 4% saving large amounts of tax. Even if the business is not run via a company, there are still large tax savings to be made.

Business Property
There is a new tax relief around to encourage urban regeneration called Business Premises Renovation Allowance (BPRA). It does this by taking derelict business property and renovating it back to business use (not available for any form of residential use). Effectively BPRA allows a 100% deduction for capital costs in the year that they are incurred against taxable profits. The relief itself is of course complicated but we have planning available which will allow that relief to be used for you to extract money from your business tax free. (If that business is run as a company the extraction will get a full tax deduction albeit there will remain an NIC cost).

French and Spanish Property Wealth Tax and forced heirship rules
If you own a property or are thinking of owning a property in these two countries you will probably be
aware that with a different legal system you face a wealth tax and problems with who gets the property
after you die. We can offer access to planning which gets around both of these problems.

Stamp Duty Land Tax (SDLT) Planning
It’s fair to say that with the advent of SDLT, planning to avoid this tax has become scarce. Due to the different legal systems in Scotland and England & Wales, some planning which works down South simply doesn’t work in Scotland. We however have planning available which can mitigate the full impact of SDLT on commercial acquisitions with a development in mind (i.e. not suitable if it’s just your house that’s involved).

Land Remediation Relief
It is well worth reminding everyone about the availability of this relief. It is not planning per se and is only available to companies but for property developers it is well worth bearing it in mind if there is any contamination involved. Essentially it allows for an enhanced deduction of 150% of the remedial costs involved. If the company is in a loss making position and cash flow is an issue, the enhanced deduction can, in the right circumstances be surrendered for a cash refund from HM Revenue. We can assist in formulating the claim and helping with the decision making process about the best use of the enhanced deduction.

Embedded Capital Allowances
One final relief to be mentioned is the issue of embedded capital allowances. These are assets which are viewed as part and parcel of the business premises which you acquire or have acquired. Although they may not have been segregated out in the Purchase documentation, they still qualify for capital allowances and that claim should be quantified and made. We can assist with all of this. The beauty about these assets though is not only do you get capital allowances helping to cut your tax bills, but if you ever sell the premises they remain deductible for Capital Gains Tax purposes too. This is a very rare instance of having your cake and eating it! These are just some of the exciting and innovative areas in which we have expertise. Remember too that we are more than happy to offer bespoke planning on a range of taxes and if you have anything in mind please get in touch.