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Plough your money into a super tax-efficient business trust

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Published on behalf of Wealth & Tax Management.

DO YOU run a successful business asks Tony Byrne, managing director of Wealth & Tax Management? Do you have a lot of cash earning you very little interest sitting in a business bank account? Fed up with paying lots of Corporation Tax? If the answer is yes to all of these questions, do something about it.

The highest rate of Corporation Tax for companies increased by 30% from 19% to 25% on 1 April 2023.  Business bank accounts pay lousy interest rates of typically 1% or less in spite of the base rate being 5.25%. Meanwhile, Consumer Price Index inflation is at 3.4%.  So if you leave your cash in your business, you are losing money in real terms.

So consider setting up a tax-efficient business trust instead.  Here are the benefits;

  • Corporation Tax relief of up to 25%
  • Tax-free growth
  • 25% tax-free cash withdrawal lump sum from age 55 (57 from 6.4.28.)
  • Access to 100% of your pot at age 55 (57 from 6.4.28.)
  • Unlimited taxable income from age 55 (57 from 6.4.28.)
  • A tax-free benefit in kind
  • Inheritance Tax-free
  • Lend money back to your business (within allowable limits)
  • Buy your company’s shares (within allowable limits)
  • Buy commercial property including for your own business (within allowable limits)
  • Protect your trust from creditors

Why would you not want to have such a super, tax-efficient business trust?  Believe it or not, I still come across people who have run their businesses for years and do not have one of these. Why? Because it is called a pension.  In this case, a particular type of pension known as a Small Self Administered Scheme or SSAS.

Some people associate it with boredom, retirement, poor outcomes etc. but if you have a large pension pot when you retire you will be very happy you decided to set one up.  You know it makes sense.

  • If you are interested in investing into a tax-efficient business trust, take advantage of a one-hour Discovery Meeting either at our offices or via a video conference call at our expense worth £270 to each of the first three readers who contact us before 31 May 2024? You know it makes sense. We offer a great cup of coffee too!

Ring us on 01908 523740 or for free on 0800 980 4516 or email wealth@wealthandtax.co.uk and quote MAY 2024OFFER to book your free discovery meeting.

RISK WARNING: The information contained within this article is for guidance only and does not constitute advice which should be sought before taking any action or inaction. All information is based on our current understanding of taxation, legislation, regulations and case law in the current tax year.  Any levels and bases of relief from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. This article is based on my own observations and opinions.

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