Business property relief (BPR) offers inheritance tax (IHT) relief of 100% or 50% on a transfer of value attributable to ‘relevant business property’. Some taxpayers make the mistake of assuming the tax treatment of an event or transaction where a substantial amount of money is at stake, instead of seeking professional advice, or at least… Read More »
A company purchase of own shares (CPOS) is often a tax-efficient way for an individual shareholder to dispose of their shares (e.g., on retirement). However, unexpected tax consequences can arise if a CPOS is not handled correctly. Income treatment As a general rule, when the company buys back its own shares from the shareholder, any… Read More »
Sole traders or partnerships often incorporate, so that the business operates through a company. This can be done in various ways. What’s it worth? For example, the business proprietor(s) might sell the business to a newly-formed company for cash, with the proceeds being left outstanding on a director’s loan account for the proprietor(s) to withdraw… Read More »
A targeted anti-avoidance rule (TAAR) was introduced (from 6 April 2016) to prevent ‘phoenixism’. In broad terms, this practice involves company owners winding up their ‘old’ companies and extracting profit reserves as capital (instead of income) and repeating the exercise in one or more successive businesses. The effect of the TAAR applying is that an… Read More »