Simpson Wood

01484 534431



Incorporation of partnership

Achieved tax saving for client of £250,000 p.a.

CLIENTS PROBLEM

We have clients who were operating as a two partner partnership generating profits of £2 million per annum. We raised concerns about their significant tax liabilities in view of the introduction of the 50% income tax rate.

OUR SOLUTION

We proposed an incorporation of the partnership into a limited company and the sale of the goodwill of the business to the limited company for in the region of £4 million. This generated an amount available to draw by the individuals of £3.6 million after paying their 10% tax liability, having taken advantage of entrepreneurs’ relief. We were also then able to use remuneration planning within the limited company.

OUTCOME

As a result of our tax planning strategy, the tax liability for the partners has been reduced by in excess of £250,000 per annum on average.
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