Project:
As a child our client was gifted shares in a confectionary company by their father.
Many years later they received a prompt letter from HMRC asking if they had any overseas income to declare in the UK. The client was confused as they thought that all relevant tax was paid in the US as they received annual returns from the US showing that tax had been paid. They asked for our help in identifying what income HMRC were referring to and help bring their tax affairs up to date.
Outcome:
We put together a timeline of how the gifted shares were exchanged for shares in other confectionary companies throughout the years and were able to identify a substantial ‘special dividend’ that was paid. We then calculated the underpaid UK tax on this dividend and were able to assist the client with declaring this to HMRC under the Worldwide Disclosure Facility.
Project:
A successful client transferred their sole trade business into a limited company but soon found that their personal earnings were expected to exceed £100,000 which would have resulted in an effective tax rate of around 60%. They asked us to help them further restructure their affairs to ensure they were being as tax efficient as possible.
Outcome:
Through discussions we were able to identify tax planning opportunities within the family. We calculated that by transferring part of their shareholding to their spouse, the family could benefit from a lower effective tax rate whilst maintaining the levels of income the family needed. We were able to demonstrate to the client what the tax consequences would be of varying levels of income and this enabled them to make decisions over the level of funds extracted from the business.
