As an advisor to owner managed businesses (typically family owned businesses) one of the most common questions that I am asked is what is the best structure to use for the business.
Over the years we have worked with a large number of business owners to identify the things that are most important to them in order to design a structure that suits their businesses and achieves their aims. The items that they consider important to achieve include:-
- Tax efficiency – income tax perspective
- The ability to invest in their business without putting themselves at risk
- An element of flexibility with regard to how the profits are distributed
- Tax efficiency – capital taxes perspective
- A structure that will allow for efficient succession planning, especially one that is able to cope with a circumstance where one child is left running the business but other children have an interest in the business and to manage that on a fair basis
- The ability to take on new projects without risking the existing ones
Despite a desire to reduce their taxation bill the vast majority of our clients do not want to engage in anything that is seen as aggressive and likely to arouse interest from HMRC.
We have therefore over the years developed a structure which whilst achieving the above goals relies on using both the corporate and taxation laws in the manner in which they were intended and is therefore unlikely to offend HMRC.
If you are in business and have similar goals to the above please contact us to see if we can put in place a bespoke structure that achieves your goals.