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Business Tax Planning Strategies for 2010

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Business Tax Planning Strategies for 2010

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    1. Business Tax Planning Strategies for 2010 Chair: Russell Dowd Standard Life Peter Rayney Peter Rayney Tax Consulting Ltd

    2. Business Tax Planning Strategies for 2010 Peter Rayney Peter Rayney Tax Consulting Ltd

    3. Business Tax Planning Strategies for 2010 Choice of trading vehicle Income extraction from small companies Spousal dividends (Income shifting techniques) CGT and Entrepreneurs relief (ER) changes

    4. Choice of trading vehicle

    5. Company v Partnership v LLP

    6. Tax - Company v Partnership v LLP

    7. Using an Unlimited Company?

    8. Sale of goodwill at MV

    9. The Tornados - Telstar

    10. Sale of goodwill at MV

    11. Joe - Case study

    12. Joe Meeks recording studio

    13. Corporate tax - goodwill

    14. Post-incorporation balance sheet

    15. Income extraction from small companies

    16. Dividend taxation 2010/11

    17. Bonus v Dividends 2010/11 Basic 60,000

    20.

    21. Spousal dividends (income shifting techniques)

    22. Maximum tax-free dividend 2010/11

    23. Paying dividends to spouses Is issue/transfer of shares to spouse a settlement Arctic Systems - key conclusions Pearce v Young - non-voting preference shares Inter-spousal settlement exemption Not where shares are wholly or substantially a right to income Ordinary shares - bundle of rights

    25. Paying dividends to spouses Is issue/transfer of shares to spouse a settlement Arctic Systems - key conclusions Pearce v Young - non-voting preference shares Inter-spousal settlement exemption Not where shares are wholly or substantially a right to income Ordinary shares - bundle of rights

    26. Dividend-splitting 2010/11

    27. David & Iman

    28. CGT and Entrepreneurs relief (ER) changes

    29. CGT rates on qualifying share sales

    30. ER share sale 3.5 Owner managers selling shares would need to satisfy the normal ER conditions within the year before the share sale (as shown above)3.5 Owner managers selling shares would need to satisfy the normal ER conditions within the year before the share sale (as shown above)

    31. ER

    32. ER share sale 3.5 Owner managers selling shares would need to satisfy the normal ER conditions within the year before the share sale (as shown above)3.5 Owner managers selling shares would need to satisfy the normal ER conditions within the year before the share sale (as shown above)

    33. ER Trading Company/Group test 3.6 The trading company/trading group requirements have been borrowed from the business taper rules. A company/group therefore qualifies provided it exists wholly for the purpose of carrying on one or more trades (on a commercial basis), subject to the disregard rule for insignificant non-trading activities. A company is permitted to have non-trading activities provided they do not have a substantial effect on the companys overall activities. HMRC take the view that non-trading activities may be regarded as substantial if they represent more than 20% of the companys business. In marginal cases, the 20% test will be applied to various measures, such as turnover, profits, assets employed, management time etc.3.6 The trading company/trading group requirements have been borrowed from the business taper rules. A company/group therefore qualifies provided it exists wholly for the purpose of carrying on one or more trades (on a commercial basis), subject to the disregard rule for insignificant non-trading activities. A company is permitted to have non-trading activities provided they do not have a substantial effect on the companys overall activities. HMRC take the view that non-trading activities may be regarded as substantial if they represent more than 20% of the companys business. In marginal cases, the 20% test will be applied to various measures, such as turnover, profits, assets employed, management time etc.

    34. ER share sale 3.5 Owner managers selling shares would need to satisfy the normal ER conditions within the year before the share sale (as shown above)3.5 Owner managers selling shares would need to satisfy the normal ER conditions within the year before the share sale (as shown above)

    35. ER Computational examples 6 April 2008 to 6 April 2010

    36. ER Computational examples From 22 June 2010

    37. Business Tax Planning Strategies for 2010 Choice of trading vehicle Income extraction from small companies Spousal dividends (Income shifting techniques) CGT and Entrepreneurs relief (ER) changes

    38. Thanks for listening

    39. Business Tax Planning Strategies for 2010 Peter Rayney Peter Rayney Tax Consulting Ltd

    40. Thanks to our headline sponsors

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