mr

sugar

Didn't find your answer?

got dental client operating as partnership with wife for over 10yrs - they want to form ltd co by transferring partnership business to LTD

Q can they include their minor children as non voting shareholders and

Q can they claim Entrepreneurs allowance of 10% on goodwill - even when it will be family owning shares ?

thank you

 

Replies (6)

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Worm
By TheLambtonWorm
18th Jul 2016 12:45

Q1) Yes - But if the motive is saving tax, then it wont achieve that.

Q2) No - Assuming that the transfer is taking place after December 2014.

Be careful incorporating a dental client, as there can be superannuation consequences.

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Replying to TheLambtonWorm:
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By sugar
18th Jul 2016 14:11

thank you - re Q 1 - saving tax from point of view is children becomes shareholders and can have div plus when sell business they can take profit - is the intention
So why u say NO FOR SAVING TAX - PL ELABORATE THANK

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Replying to TheLambtonWorm:
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By sugar
18th Jul 2016 14:13

tHANK YOU Q2 transfer this year so tax will be 20% not 10%
and understand superann - even director work as associate will hav benefit of Superann is my understanding

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By Tim Vane
18th Jul 2016 14:28

They should obtain professional advice from an accountant, as it sounds like they are basing their decision on incorrect information. For example, they may not understand that the dividends paid to their children are taxable on themselves, and that there is unlikely to be any tax savings from such a change. Are you their bookkeeper? You should advise them to talk to an accountant who can review the figures and give them a better idea of what incorporation is likely to cost.

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Replying to Tim Vane:
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By sugar
18th Jul 2016 14:42

tHANK YOU - someone else was advised by his solicitor to add children in similar circumstances - hence this Q - i presume from what u r saying is that as children are using parents money to acquire shares - than income of children is treated by hmrc as if income of parent - thank you i will advise him to talk to experts - once again thank you for your kind advice

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Replying to sugar:
Tom McClelland
By TomMcClelland
19th Jul 2016 11:34

Take legal advice from solicitors and tax advice from accountants. You are dealing in a complex area and it is easy to form incorrect conclusions as you're already discovering. If it were possible to avoid significant tax by transferring ownership to minor children then everyone would be doing it, as it is such an obvious ploy.

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