Tax Planning for Businesses and their Owners

Overview

2006/07 has been a significant year for tax legislation, seeing in the introduction of a new personal pensions regime, the abolition of the nil starting rate for Corporation Tax, and the alignment of Inheritance Tax for the various types of trusts.

This report is aimed at owners and managers of businesses, and offers advice on the tax implications of their business decisions. It guides owners towards both business choices and personal transactions that will help to secure opportunities for tax reduction.

In the midst of wide-reaching change in tax regulations, the author, a financial consultant and lecturer, uses his experience and expertise to provide a timely advisory text, which concentrates specifically on relieving the tax burden.

Contents overview

1 Income from Companies
2 Savings and Investments schemes
3 Sole traders and partnerships
4 Income tax of individuals
5 Corporate tax
6 Capital allowances
7 Capital gains
8 Inheritance tax
9 Trusts
10 Value added tax

Content

CHAPTER 1: Income from companies

• Dividends or salary?
• Implications of the ‘Arctic Systems’ case
• Benefits in kind
• Termination payments
• Employee share schemes

CHAPTER 2: Savings and investment schemes

• Enterprise Investment Scheme
• Venture Capital Trusts
• Community Investment Tax Relief
• Tax-exempt savings income

CHAPTER 3: Sole traders and partnerships

• Loss Relief
• Property income

CHAPTER 4: Income tax of individuals

• Allowances
• Extension of basic rate band
• Overseas income

CHAPTER 5: Corporation tax

• Losses
• Groups
• Purchase of a company’s own shares
• Substantial shareholding relief
• Corporate Venturing Scheme

CHAPTER 6: Capital allowances

• Plant and machinery – general principles
• Cars
• First-year allowances
• Short-life assets
• Industrial buildings allowances
• Disclaiming capital allowances

CHAPTER 7: Capital gains

• Basic principles
• Taper relief
• Assets owned before 1 April 1982
• Annual exemptions
• Transfers between spouses
• Capital losses
• Principal private residencies
• Reliefs
• Chattels

CHAPTER 8: Inheritance tax

• General principles
• Taper relief
• Exempt transfers
• Reliefs
• Domicile
• Interaction with Capital Gains Tax

CHAPTER 9: Trusts

• Interest in possession trusts
• Discretionary trusts
• Accumulation and maintenance trusts
• Charitable trusts
• Overseas trusts
• Business Property Relief and trusts
• Comparison of trusts

CHAPTER 10: Valued added tax

• Registration
• Land and buildings
• Special schemes

APPENDIX

• Income Tax – personal and married couple’s allowances
• Income Tax – rates and bands
• Gift Aid – limit on benefit received by donor
• Cash equivalent of company car 2005/06 to 2007/08
• VAT – fuel scale charge
• Corporation Tax – rates and bands
• Capital Gains Tax – annual exemption
• Capital Gains Tax – taper relief
• Inheritance Tax – nil rate band

The author

Peter Hughes, M.A. (Oxon), A.C.A., is a Chartered Accountant, with his own consultancy firm. He writes and presents seminars on taxation, International Financial Reporting Standards, and company and employment law.