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IFAs Your business – Tax Planning

IFAs Your business – Tax Planning

Revell Ward Limited is a firm of Chartered Accountants and Chartered Tax Advisors in Huddersfield.

In addition to providing the usual accounting services, we offer an extensive   integrated tax advisory service giving access to specialists covering all of the main taxes, including income tax, capital gains tax, inheritance tax, trusts, PAYE /NIC and VAT.

We regularly work with IFA’s like you.  Whether to provide tax planning advice to you and your business, or to complement your services by providing tax advice to your clients.

Here are a few recent examples demonstrating how we have added value to our IFA clients through tax advice.

Business structuring

A long established firm of IFAs approached us to review their business structure.  They had always traded as a partnership, but with the introduction of 45% income tax felt that they were paying more than their fair share of tax.

Our review highlighted the benefits to incorporating the existing business achieving initial tax savings of £600,000 plus further annual savings of £6,000 per partner.

Exit of minority shareholders

A larger IFA practice trading as a limited company found itself with a couple of minority shareholders who were no longer actively involved in the management and development of the business.  The majority shareholders wanted to buy back these shares via the company, but there was insufficient cash within the business to enable a share buy back to take place.

With careful planning we were able to structure an exit plan over an agreed period of three years.  All minority shareholders claimed entrepreneurs relief and so achieved a 10% tax rate on the proceeds they received. Tax savings averaged £45,000 per shareholder.

Reorganising activities

One of our IFA contacts asked us to advise his client on the availability of business property relief on the shares in his family company.   Whilst the company did carry out a trading activity this had reduced significantly over the years and a large part of the old trading site was rented out to third parties. As a result business property relief was at risk, without this relief the IHT liability increased massively.  We were able to restructure the business activities to protect business property relief on the value of the trading business and to achieve a potential IHT saving of approx. £800,000.