Tax

Tax advisory services

Comprising members of the Chartered Institute of Tax, Association of Tax Technicians, Society of Trust and Estate Practitioners (STEP) as well as accountants and a former HMRC tax investigations specialist, our tax team has been providing tax advice for a combined period of over 100 years.

We offer a wide range of tax advisory services to a broad spectrum of clients including high net worth individuals, entrepreneurs, landowners, highly paid executives, trust beneficiaries, trustees, executors and companies.

Many of our clients have overseas and international interests or connections and are involved in complex structures requiring our expertise in domestic and international tax issues and we work closely with offshore trustees and advisers in other jurisdictions to help provide a seamless service.

We work with clients to understand their personal and business goals, designing tax solutions which enable them to achieve those goals in a tax-efficient manner.

Tax knowledge and expertise

There are many taxes levied in the UK which impact both businesses and individuals, including income tax, capital gains tax, corporation tax, national insurance, inheritance tax, stamp duty land tax and stamp duty and our team has proficiency in all these areas.  In addition, we know and can help you understand in straightforward terms:

• how the different taxes interact
• the reliefs which are available
• how anti-avoidance rules can affect planning
• the procedural and reporting requirements which must be complied with
• how the UK tax treatment may be dictated by a double tax agreement with a foreign jurisdiction
• how Court decisions could impact on planning
• HMRC’s view on the proposed planning.

Shareholder exits

Many business owners will only experience one significant transaction in their business life – the sale of their company. Giving thought to the tax consequences of a sale early in the process is key to ensuring that the commercial objectives of the vendors are met in the most tax efficient manner.

In addition, giving thought to incentivising key staff who may be fundamental to any successful exit strategy should also be considered at least two years ahead of any potential sale if tax reliefs are to be maximised.

No two transactions are ever the same and we have significant experience in advising shareholders, from many industries, on all aspects of a sale, to include sales of shares, whether that be to a third party purchaser, to the management team, to an Employee Ownership Trust (EOT) or back to the company.

Our tax advice on exits can also cover support with Members’ Voluntary Liquidations.

Our tax advice includes:

• Pre-sale tax planning, to ensure tax reliefs which are only available to the vendor pre-sale are fully utilised
• Pre-sale share/share option incentives for employees
• Pre-sale restructuring of the company or group, to include property or business demergers or mergers, to facilitate a sale
• Advising on the availability of Business Asset Disposal Relief for individuals and the Substantial Shareholdings Exemption at company level
• Advising on the tax treatment of the proposed consideration to be received
• Preparing the recommended pre-transaction clearances to HMRC
• Providing disclosures regarding the sale to the vendors for inclusion within their self-assessment tax returns.

Business restructuring

Our team can provide tax advice on company reconstructions and reorganisations to include mergers and demergers. Common commercial reasons to want to demerge the activities of a company into different entities might include:

• Enabling commercial protection between business streams, for example, where one carries more risk
• Splitting out the premises from the trade to protect the value of the premises or to allow the sale of the trade whilst retaining the premises
• Incentivising separate management teams through share ownership of the business in which they are involved
• Facilitating the sale of one of the company’s businesses.

Separating existing business activities into new companies can prove costly in tax terms for both shareholders and companies. Ensuring demergers are undertaken as far as commercially possible to meet the conditions for the specific tax reliefs available can significantly reduce and often eliminate any tax costs.

Succession planning

Shareholders wishing to exit a business may prefer to pass their shares to the next generation rather than sell them outside of the family.

Family dynamics vary and often the most tax efficient way of achieving the existing shareholders’ objectives will differ. Passing company shares to the next generation should not be considered in isolation, but as part of a broader estate planning strategy and our tax team works closely with solicitors in our Wills and Estate Planning and Family Office teams to achieve this.

Employee share incentives

Many businesses look to find ways to incentivise and retain key staff, tying the goals of employees with those of the business. Shares and share options to reward and incentivise staff can be very efficient from a cash flow perspective and offer significant tax savings for both the company and the employee.

From Employee Ownership Trusts (EOT) to Company Share Option Plans (CSOP) we can work with you to advise on all aspects of share and share option incentivisation including:

• Bespoke tax advantaged share/option-based arrangements such as Enterprise Management Incentive (EMI) schemes
• Bespoke non-tax advantaged share/option-based arrangements
• Share incentive tax valuations.

We offer tax advice for all parties affected by the incentive arrangements which can include the company, existing shareholders, employees and trustees and advise on the reporting requirements in respect of the Employment related securities awarded.

HMRC investigations and disclosures

The prospect of an HMRC enquiry can be stressful but with significant practical experience of dealing with HMRC enquiries, specifically the more serious Code of Practice 8 and Code of Practice 9 investigations, we can liaise with HMRC on your behalf to help resolve an investigation. Remaining vigilant to requests for information, we aim to minimise the disruption the investigation might have on your personal and business interests.

Our hands-on experience and background knowledge of making disclosures under the appropriate HMRC disclosure facilities (such as the Worldwide Disclosure Facility) helps facilitate the process and, if an individual, company or trustee has received an HMRC enquiry, investigation or ‘nudge’ letter, we can provide guidance and representation specifically:

• Investigating what prompted HMRC’s letter, and what information should be provided to HMRC in the first instance
• Representing you throughout the entire investigation, including direct correspondence with HMRC, managing their requests for information and negotiating any settlement at the conclusion of an enquiry
• Providing a consultancy role during the enquiry and providing specialist advice to incumbent advisers where needed, such as a contentious technical argument or a meeting with HMRC
• Making voluntary or non-voluntary disclosures to HMRC, for example if an individual has received a nudge letter from HMRC in respect of their offshore income, assets or gains.

Property transactions

The sale, acquisition, gift or transfer of property by other means can all trigger tax charges in the UK, whether the transaction is undertaken by an individual, partnership, company or a trust.

Understanding not only which taxes and which reliefs may be applicable on the transaction but also the reporting requirements and payment deadlines is crucial to ensure unnecessary penalties and interest are not triggered.

We have significant experience in providing tax advice in respect of property transactions related to:

• The sale of land for development e.g. farmland sold for house building
• Demerging properties from a company to facilitate a trade sale
• The availability of Private Residence Relief, for example, where land sold exceeds the ‘permitted area’ or where the residence is no longer occupied or is abroad
• The circumstances determining whether a disposal falls within the 60 day capital gains tax (CGT) filing rules
• The applicability of the stamp duty land tax (SDLT) surcharge for additional dwellings
• The SDLT surcharge applicable to non-UK residents
• The circumstances in which a property could be treated as non-residential in order to reduce SDLT costs
• Reclaiming the SDLT surcharge on additional dwellings
• Annual Tax on Enveloped Dwellings (ATED) reporting
• Disposals by non-UK residents of shares deriving their value from UK property
• The non-resident landlord regime, whether this be related to individuals or companies
• The tax reliefs available when moving properties around a corporate group.

Residence and domicile planning

Residence and domicile planning, outlined in more detail here, is complex and requires specialist tax advice and our team can help you understand your tax position, obligations and options related to this.

Employee Benefit Trusts (EBTs)

EBTs have been widely used by businesses in the past to reward and incentivise staff. Many were established for tax avoidance purposes and did not ultimately achieve their intended aim of rewarding employees tax-efficiently. Many are also used to provide a means of purchasing shares from employees as part of a share incentive scheme.

Whatever the reason for having established one, its existence can cause issues if a company which has established an EBT is marketed for sale.

In addition, the ongoing use of them requires tax compliance requirements to be met.

We have significant experience in advising settlor companies, trustees and beneficiaries of EBTs on the tax consequences of numerous transactions, including allocating funds, shares or other assets within EBTs, distributing funds from EBTs and the use of EBTs to facilitate share schemes.

Tax compliance

Personal, trust and foreign company tax compliance

We provide advice on the tax compliance aspects of planning on which we’ve advised and can undertake tax compliance services including:

• Annual self-assessment tax return preparation for individuals
• Annual self-assessment tax return preparation for trusts
• Annual corporation tax return preparation for offshore companies holding UK property
• Capital gains tax (CGT) 60 day reporting for UK residential property disposals
• Annual Tax on Enveloped Dwellings (ATED) reporting.

 

Tax efficient investing

Tax efficient investing and fundraising

Many entrepreneurial clients are prepared to risk their capital to help fund new ventures which might struggle to raise funds from more mainstream funding sources. The tax reliefs available for such funding, such as Enterprise Investment Scheme (EIS) relief and Seed Enterprise Investment Scheme (SEIS) relief, are very valuable.

Whilst EIS and SEIS relief are there to encourage investment, the legislation is far from straightforward. Ensuring the conditions are met both prior to, and following the investment, is essential to the reliefs being available and not withdrawn.

We can help investors exploring an investment opportunity by working with their target company to establish whether the conditions for the reliefs to be available will be met. We can then work with the company to seek Advance Assurance from HMRC that they agree the company will qualify.