Tax Planning
Perry's major specialism
is tax planning. The UK’s tax regime is extremely complex.
This gives considerable opportunity for efficient tax planning
– in many ways there are far greater opportunities than
would arise with a simpler taxation system.
In considering potential
clients tax affairs we can almost always devise efficiencies
that create very substantial tax savings. A frequently posed
question is “How can you save me tax – when I
do not pay very much at the moment?” What many people
forget is the total tax burden. Have you ever calculated how
much a year you and your business pay in Corporation Tax,
VAT, PAYE, National Insurance and on individuals personal
income tax? It is likely to be a very substantial sum. Perrys
approach is to look at a client’s overall tax position.
We look at all avenues where tax is paid and advise on those
where tax savings can be achieved.
Our favoured tax planning ideas are usually
relatively straightforward – it is just that other people
have either not thought of them or are unable to refine them
properly. We tend to err strongly away from tax planning that
involves insurance products and other investment schemes.
Although theoretically these schemes are often very attractive
from a tax perspective there is often a grave risk of “the
tail wagging the dog”. We see little point in having
an efficient tax planning scheme where the underlying investment
loses money! Of far greater interest to clients are arrangements
that do not involve any form of investment or insurance products.
A large part of our recommendations usually involve changing
structures to make full use of the benefits that can be gained
by forming limited companies and forming or altering group
structures. Arrangements frequently involve different classes
of shares and parallel partnerships. Although this may sound
complicated one of our principal objectives is to ensure that
our planning is not complex for the client. We will normally
deal with all of the necessary paperwork and give clear instructions
on any minor administrative changes that need to be made.
Where clients have either overseas trading
activities or alternatively if the principals are overseas
domiciled or resident then opportunities may be available
utilising offshore companies or trusts. We have an expert
who advises on these specific opportunities.
Inheritance Tax planning is often an area
that is widely ignored. If however a large part of your estate
is potentially liable to tax at 40% whatever your plans are
for a long life, some simple tax planning maybe advisable.
Many people have not made wills, but nonetheless assume that
their estate will simply pass to their wives and as such will
avoid Inheritance Tax. This is frequently not true and the
simple drawing up of a will, possibly in conjunction with
a straightforward nil rate discretionary trust, could save
huge sums of money. Where there are more substantial sums
of money involved, or for older people, there are various
other trust opportunities. We have a specialist that can advise
on all trust matters.
The Capital Gains Tax regime can nowadays
be very generous – but only if you have arranged your
affairs in the most tax efficient manner. Planning at the
time of acquisition is an ideal situation but remedial planning
can often be effected afterwards. One point that must be borne
in mind is that the tax legislation changes on a frequent
basis. The advice that may have been given in the past may
no longer be relevant. A good example of this is the whole
question as to whether or not commercial property should be
held in the name of a limited company or by individuals. The
answer to this question has changed fairly frequently over
recent years. The current position varies according to individual
circumstances – but to get it wrong can prove very expensive.
There are very few people that do not want to reduce their
overall tax burden. Equally we find that there are significant
opportunities available. A regular review in this area can
save even the smallest of clients many thousands of pounds
per annum. All of our consultants are able to assist in this
area. For certain specialised areas we have individuals within
the firm that can be brought in to assist.
For tax planning advice contact your local
consultant.
For Inheritance Tax advice contact Stewart
Pope at pope@perry-company.co.uk
or telephone 020 7256 9339.
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