I contemplated transferring my business to a limited company and I knew I could rely on AAB to make the process as straightforward as possible whilst providing the accounts and tax advice to enable me to make the right decision.
Colin Brown
Taking a long-term view and creating a portfolio to benefit your family can be one of the most tax-efficient routes to owning property, reducing your exposure to IHT and income tax. For example, by setting up a company with your family as shareholders, you can reduce the tax payable by using the personal allowances and lower tax bands of family members who earn less than you. You can use the dividend allowance when you pay dividends, and it is easier to transfer shares in the company to family members rather than having several family members own the same property directly. This provides the opportunity to undertake IHT planning and reduce the IHT payable on your estate.
The drawback is that this structure is most tax efficient if the majority of the profits and gains are kept within the company to benefit younger family members, as there’s a potential double tax charge when you take income from the company, particularly following a property sale. If the income is likely to attract higher tax rates or you’re thinking of selling a property from your portfolio, we suggest you talk to us first.
