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.