The Importance of A Clean Workspace
The importance of having a clean and productive workspace goes without saying. Yet many businesses do not have effective cleaning measures in place in the workp...
The importance of having a clean and productive workspace goes without saying. Yet many businesses do not have effective cleaning measures in place in the workp...
Latest Employment Law Changes in 2023 Over the coming months, we are going to see significant changes in Employment Law that will impact all businesses. There...
P34B is a professional services and coaching business based in Lancashire, which seeks to enable people and businesses to achieve more with less. It was announc...
A family-run firm of civil and geotechnical engineers has changed hands in a seven-figure buy-out that will secure its future as a leading independent in the in...
Burnley based HR software providers, HRX People, celebrated the launch of their HR platform at The Igloo at Nelson and Colne College. Following a soft laun...
The payroll year-end is just around the corner, for all employers payroll is a critical aspect of their business that requires a lot of time, focus, and attenti...
As business owners and entrepreneurs face rising tax costs on dividends and a period of economic uncertainty it is now more important than ever to ensure their business structure is fit for purpose.
Standalone companies offer little flexibility to build passive investments. Profits are either taken as dividends resulting in significant income tax or invested by the company in property or other assets where these assets are exposed to the trading risk of the business – simply these assets could be used to settle company liabilities if it became insolvent.
However alternative structures can be established to protect assets, structure ownership between families, and pass on wealth.
Establishing a holding company - the “Parent”, above a trading company is one alternative. Principally this protects valuable assets in the Parent from the debts and liabilities of the trading company. Tax savings can also be achieved as dividends paid to the Parent are not subject to corporation tax leaving more cash available for investment. However, if the trading company is sold, the proceeds will go to the Parent, not the entrepreneur.
Under an alternative hybrid structure, share capital in a trading company is split between the entrepreneur and the Parent. Dividends can be paid to the holding company where cash can be invested and ringfenced from the trading activities and if the trading company is sold the proceeds will go to the entrepreneur which maintains valuable tax reliefs.
By making wider family members shareholders in the Parent the structure can also be used to help plan for succession and reduce inheritance tax.
If you are considering restructuring your business, seeking the advice of a Pierce tax specialist can ensure the best outcome for you and your business. Please don't hesitate to contact us.
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