Tax planning
At Best Commercial Finance we have teamed up with Haven Tax Solutions LLP to provide our business clients with solid, practical and proven tax advice.
Haven can help you reduce or even eliminate your business and personal tax liabilities!
Haven’s tax strategies are aimed at the Small to Medium Business sectors; they offer the most up to date and leading edge thinking in business and personal tax minimisation for business owners. All products have been carefully thought through and interrogated thoroughly by eminent Tax QC’s.
Haven have developed Trust plans to benefit you, your business and your employees.
All directors owning their own companies are interested in maximising their net disposable income.
For those already utilising conventional tax planning tools i.e. minimum salary + dividends, and still paying higher rate tax, Haven have developed two strategies to mitigate or even eliminate their tax liabilities:
Personal tax plan: This product involves a company making a contribution out of taxed profits to a purpose trust. Directors and / or employees are able to access the funds tax and NIC free.
Corporate tax plan: This product is similar to the PTP above except it also achieves a corporate tax deduction for the company; the best of both worlds!
CASE STUDY
Problem Company A Ltd is owned and run by 3 directors / shareholders and employs 5 staff. In respect of its year end 31 December 2007 it has £200K available to pay the directors a bonus. The directors approached Haven to provide advice on how to extract the profits in the most tax beneficial manner.
Using conventional options, after-tax receipts for the higher rate paying directors are as follows:
- Salary: for every £10,000 profits, the directors receive £5,230 net
- Dividend: for every £10,000 profits, the directors receive £5,925 net.
The better alternative (2) shows the directors would only obtain 59% of the original profits; a situation they wanted to improve upon if possible.
Solution
- A purpose trust is formed.
- The company makes a contribution of £200K to the trust.
- The directors approach the trustees to access the funds.
- Funds are accessed at zero tax or NIC cost to them and to the trust.
- For every £10,000 of company profits, the directors receive £7,900 net, a 20% increase in net funds accessed when compared with the dividend option.
General tax issues
- Access to the funds does not crystallise employment income tax and NIC charges.
- If the directors wish to leave the funds in trust for use at a later time, any income or capital gains made by the trust will be tax free.
- The trust deed can be widely drawn such that dependants or other relatives can benefit from the trust on the same basis.
- The transfer of the funds by the company does not represent a transfer of value for inheritance tax purposes.
- The funds in the trust are outside of the directors personal estates for inheritance tax purposes.
Tax counsel approval
Both of the business trust plans have been carefully constructed using available tax relief’s and exemptions provided by the Taxes Acts. They have the support of eminent tax counsel. When implemented, they are fully disclosed and completely transparent to the Revenue authorities.
Interested in saving tax? Please call 0800 1182254 and allow us to make an introduction to Haven Tax Solutions LLP
The above information and illustration is based on the Taxes Acts at the time of preparing this web page. The illustration only serves as general guidance and does not constitute investment or tax advice in itself. As ever, you should always consult a professional adviser in relation to your own particular circumstances. We do not accept liability for any actions taken as a result of the content of this document.
