Tax Reduction

Income Tax Mitigation

We have a number of services aimed at reducing income tax. The most common is our tax efficient remuneration service. At its simplest we look at how you are remunerated by your business and ensure it is structured in the most tax efficient way. At the other end of the scale is our Employee Bonus Trust Strategy noted further on. We also use pensions and other tax efficient investments for income tax mitigation. We also use techniques to turn an income receipt into a capital receipt as the tax treatment is much more generous. The pre year end tax planning review is often a good time to review this important area.

Tax Planning With Corporate Structures

The corporate structure you use is very important from a tax planning perspective. The choice is Sole Trade, Partnership, Limited Liability Partnership and Limited Company. Please call us if you are thinking of starting a new venture or separating out a part of your existing business. If you want to save tax it is crucial that you speak to us about before acting.

Strategic Tax Solutions allow you to access massive tax savings. They are purely value added; the fee is based on the tax saved.

The examples below detail some of the savings available. If you qualify for a strategy call us now on 0121 764 5161 to discuss your options in more detail.

Derivative of Employee Bonus Trust

This is a profit extraction strategy for senior management of limited companies. The table below details extraction of £1,000,000 profits out of a limited company and paid to the director(s), the left column being with no tax strategy at all, and the right with the EBT route.

NO TAX STRATEGY

EBT ROUTE

Profit of £1,000,000

Corporation Tax @ 30%
£300,000 to Inland Revenue

Balance of £700,000

Profits paid as Dividend
Income Tax of 25% on £700,000
£175,000 to Inland Revenue

Final Balance of £525,000

Total Tax Paid £475,000

Profit of £1,000,000

£1,000,000 transferred into Employer Bonus Trust

After all costs and expenses

Final Balance of £860,000

Saving of £345,000

There is no upper limit on the profits that can be sheltered.

To qualify for this strategy the company must meet all of the following criteria:

• It is a Limited Company

• The Company is “trading”

• The Company has 3+ employees

• The Company has greater than £300,000 profits for the current year and greater than or equal to £300,000 available in it’s bank account.

Stamp Duty Mitigation

This strategy applies to Residential Property purchases over £1,000,000 and Commercial Property purchases over £2,500,000.

There are no upper limits on property value. This gives a great deal of scope for savings on high value property transactions. The strategy allows the client to save 75% of the stamp duty payable. The tax paid is Nil and the fee is 25% of the tax saved, meaning the client saves 75% of the stamp duty. See below:

No Strategy

With Stamp Duty Strategy

£1,000,000 residential purchase

Stamp Duty @ 4%

£40,000 paid in stamp duty