Personal Tax

By amending your articles of association, you can create a new class of shares, retaining voting or dividend rights as you instruct us but to issue growth shares to your children which represent the future growth in the value of the company thereby reducing future inheritance that may otherwise be due and with minimal CGT implications.

An alternative would be to gift your shares to your children. Shares you hold in your company are your assets, and if you pass these on you are disposing of them for Capital Gains Tax purposes, even if you do not receive anything in return. We will consider whether you can make use of reliefs such as Holdover Relief to defer any charge, and whether you can reduce CGT further by setting up a trust to hold the shares, or by passing them to your spouse.

Speak to one of our inheritance tax solicitors for more advice on  how to reduce potential future charges to Inheritance Tax which may become due on an increase in value after you pass the shares on, for example through the application of Business Property Relief and exemptions.

We understand that Inheritance Tax can be a significant factor in arranging family assets.

A life interest trust is a trust set up in a will by one spouse, which provides the surviving spouse with the right to receive the income from, or to use property comprised in, the trust.

On the subsequent death of the surviving spouse, the underlying trust assets form part of their estate for Inheritance Tax purposes.  Clearly this can result in a substantial charge.

Our tax solicitors can help you to consider ways to minimise Inheritance Tax on your mother’s death by considering whether there are powers within the trust to make distributions to the children or to trusts for the children, directly from the trust during your mother’s lifetime or looking at the investment profile of the trust to utilise Inheritance Tax exemptions such as Business Property Relief.  In certain circumstances it may be possible to make a variation to his will to redirect the property.  Alternatively or perhaps additionally, you may wish to consider other options to keep the charge on your mother’s estate to a minimum, for example by reducing the value of other assets within her estate before her death.  This could be achieved through transferring these into trusts, or by making gifts.

Our inheritance tax solicitors can explain all the options to help mitigate your Inheritance Tax (IHT) liability and reduce your overall tax bill.

If you live outside the UK, but are domiciled in the UK (i.e consider the UK to be your permanent home), you are chargeable to UK tax on any UK income and gains.

Any gains from selling a UK property will be subject to Capital Gains Tax (CGT). Being domiciled abroad and selling a UK property will also be subject to UK tax on any capital gains.

Using a specialist tax solicitor can help establish your domicile and residence, and to consider how to make best use of exemptions and reliefs to keep any Capital Gains Tax to a minimum. For example, you may wish instead to transfer ownership of the property to a spouse, rent out the property, and/or set up a trust to hold the property thereby deferring the tax chargeable gain.

Using a specialist tax solicitor can help you consider all the options for reducing these risks, including whether incorporating a company is the best way ahead. Tax can be a significant factor in your decision-making.

We can explain the potential charges to Capital Gains Tax (CGT) which may arise on transferring any assets into your newly incorporated company, and consider whether reliefs and exemptions, most significantly Incorporation Relief, can be used to defer or reduce such charges.  We will also help you to understand how, following incorporation, the charge to Corporation Tax will impact on your business, and what your tax reporting obligations will be.

Instead of incorporating a private limited company, you may instead wish to consider continuing in business as a sole trader, joining with a partner to form a partnership, or by setting up another company structure such as a company limited by guarantee. Our specialist tax solicitors can talk you through the tax implications of your options, including employing staff, to help you to be confident that you have made the best decision for you and your business.