can client get benefit of CGT at 10% on "income"?

My doctor client has been approached by another firm of accountants with a proposal that the client incorporates the medical private practice.

Facts: NHS salary £90k, sole trader private practice profits £200k. IR35 would not apply if incorporated and the client is unmarried.

Proposal: put private practice into ltd co. Live off NHS salary plus say £50k of dividends in order to fund large mortgage on own home. Leave reserves to accumulate over a number of years until retained profits reach say £750k. Then pay a liquidator say £5k to wind up the company, distribute net assets, pay CGT at 10% on the £750k.

Being a cautious soul, I pointed out some possible problems, if only that in say 5-6 years time, the tax rules on which the plan is based may have been changed.

However, assuming no change in tax law – or HMRC’s interpretation of it! – do you think it would work as proposed?

Thanks in advance.

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Usual?

petersaxton |
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@Peter

Red Leader |
Red Leader's picture

Too easy?

petersaxton |
petersaxton's picture

Might work

gbuckell |

Simpler way

cliver23 |
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Trading Company

justphil |

investment company

jsaskew |

Investment Company

Ermintrude |
Ermintrude's picture

Incoporation?

mewsans |

Tax-efficient ways to earn income from one's own business

jkd |

@cliver23

Red Leader |
Red Leader's picture

TRANSFORMING TRADING PROFITS INTO CAPITAL GAINS

JOHNWEALLEANS |

What !

lisler |

Was somebody shouting something?

Monsoon |
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TRANSFORMING TRADING PROFITS

JOHNWEALLEANS |

Please....

Monsoon |
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Constantly Confused |
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What about other taxes?

lisler |

Does this not come under esc16 ?

Fmaat |
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ESC C16

Ermintrude |
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