Share schemes

If your business is looking to use shares to incentivise employees, we can advise on the benefits to employees and employers of approved and unapproved share schemes, including Enterprise Management Incentives (EMIs). We can review which scheme is most appropriate for the company and help to put that scheme in place.

This work may require valuations of the shares to be undertaken and then agreed with HMRC prior to the implementation of a scheme.

Tax-efficient employee benefits

To help your business attract, retain and remunerate employees, we can review of the current employee benefits provided, including whether any can be adjusted to maximise the tax benefits to the employer and employee. We can also recommend further benefits.

Reviewing termination agreements

We can review proposed employment termination agreements to ensure that they are tax-efficient for both employer and employee. This may assist in the employee accepting a termination offer.

We can also liaise with lawyers to ensure all documentation is in order and robustly worded with a potential HMRC enquiry in mind.

For employees who are discussing termination agreements with their employer, we can review the termination agreement and explain the tax implications of any amounts to be received by the employee.

Freezer/growth shares

Bespoke tax planning, used to attribute future growth in a company within an investment business to shares held by the next generation.

The planning usually requires changes to a company’s articles to implement the new class of share, so legal advice is required in addition to our tax advice.

Family Investment Company (FIC)

A structure which usually involves a new company with bespoke share classes and shareholding arrangements, funded by the parents. It is used to freeze parents’ estate values for inheritance tax purposes so that the future growth in the wealth amalgamates in a company and is therefore attributable to the shares owned at least in part by the children.

We can advise on different methods of structuring and funding the FIC, and the tax implications of each. We collaborate with lawyers for a complete service, providing bespoke articles and shareholder agreements.

Transferring (including gifting) shares in investment companies

The transfer of shares in investment companies between generations usually triggers a capital gains tax (CGT) charge.

Passing the shares to the new shareholder at their original base cost (holding over any gains) through the use of discretionary trusts may mitigate this CGT. We can assist with the careful multi-year planning and implementation usually required.

Review of family IHT position

With inheritance tax (IHT) thresholds frozen until 2026, a growing number of estates will be required to pay IHT.

We can review your family’s current position and recommend how the estate may be adjusted so that IHT liabilities are minimised. We’re sensitive to individual families’ appetites for complex tax planning and the ages of those involved in the planning.

Offshore wealth planning structures

Reviewing the family position for UK-resident individuals to explore the use of offshore trusts, foundations and companies for tax planning purposes.

This would include discussions with your family to understand your future plans and income requirements, resulting in a report to help you make an informed decision on how to structure your wealth.

As an AGN International member firm, we can collaborate with fellow advisers in over 80 countries for local advice on overseas implications of this planning.

Review of offshore tax planning structures

As plans change for you and your family, so too do the requirements for certain offshore tax planning methods.

We can review the current structures in place designed for wealth planning purposes, and recommend any updates needed to bring it in line with best practice, legislation and case law changes.

Divorce

Calculating tax liabilities which may arise as a result of divorce proceedings.

Structuring your assets before a divorce may reduce these tax liabilities. Working with your legal team, we can review the division of assets to ensure that, where applicable, the most tax efficient divisions are put forward as suggested asset division arrangements.

Probate

A specialist service not available from all accounting and tax advisory firms; provided by BKL with ICAEW accreditation.

We help assist executors and administrators with the paperwork required to obtain probate. This includes:

• Listing and valuing assets and debts
• Preparing and filing the inheritance tax return
• Preparing detailed accounts for the estate
• Proposing a distribution of the estate to the beneficiaries for their approval

We can also act as executor or administrator and manage the whole process.

Bringing in family members

If you are parents, we can help you to add children to a property portfolio you own in order to create a partnership, enabling the use of the adult children’s basic rate bands.

Incorporation

Incorporating a property portfolio – taking it from being held and operated in the names of individuals to a corporate entity owned by the individuals – has tax-efficient advantages but is a complex process.

We can advise on how to structure the incorporation in the most tax efficient way, with the aim of minimising any taxes arising immediately on the incorporation, and can prepare a plan to guide you through the process.

Furnished holiday lets (FHLs)

Changing the activity of a property company from long-term letting to furnished holiday letting can change HMRC’s classification of the company and may bring tax-efficient advantages.

We can help by:

• Developing a plan for morphing the activities of your company to enable the application of reliefs to hold over the gains on shares gifted from parents to children
• Implement the share gifts
• Preparing the necessary paperwork
• Making the required disclosures to HMRC

Stamp duty land tax (SDLT) advice

Reviewing proposed transactions to ensure they are structured to mitigate SDLT or take advantage of reliefs afforded within the SDLT legislation.

In our experience, lawyers acting for the purchaser will usually require an analysis to support the claiming of relief. This analysis is something which we can prepare.

Where there is a question over SDLT paid on a completed purchase, we can review the transaction and the facts with the view to suggesting an appropriate relief or confirming that the right amount of SDLT had been paid.

Annual Tax on Enveloped Dwelling (ATED) returns

Where a company owns a residential property and the value of the property is greater than £500,000, HMRC requires an Annual Tax on Enveloped Dwellings (ATED) return to be filed each year. The first return must be submitted within 30 days of the purchase of the property by a company. There are exemptions from this value based scale charge.

We can assist you in the preparing and submitting ATED returns, and ensure that the correct exemption from the charge is taken where appropriate.

International expansion

International expansion can be a big next step for SMEs and comes with a plethora of unknowns. We can help by:

• Discussing your plans and proposing methods of structuring the expansion as tax efficiently as possible
• Producing a report, with the assistance of firms in our global AGN association, to set out the direct, indirect and employment tax implications of the proposed expansion and support you in making an informed decision
• Collaborating with AGN colleagues, spanning over 80 countries, to put in place the best structure for a smooth corporate expansion

Transfer pricing

For UK tax purposes, where a company is large (or in certain circumstances medium sized), all transactions between related entities must be undertaken on an arm’s length basis. To support this, a transfer pricing agreement needs to be put into place.

We can prepare the transfer pricing agreement and agree it with HMRC where necessary. We can also review an outdated agreement and suggest amendments to bring it into line with current practices.

Interest deductibility

Where interest arrangements are cross-border, or amounts payable exceed £2m, care is needed to ensure that either the full amount can be deducted or the necessary restrictions on the interest deduction are put into place.

Our review can assess whether interest can be deducted in full or if there the amounts deducted need to be restricted under the hybrid mismatch rules, transfer pricing rules or corporate interest restriction. We can also prepare a report setting out which of the rules apply and how the restriction needs to be applied.

Withholding tax

Where payments of interest and royalties are being made, there may be a requirement to withhold tax from the payment and pay this to HMRC.

We can review transactions to determine whether withholding tax needs to be applied to payments. We can also advise on whether tax treaty rates can be applied to payments made to non-UK based parties or if the requirements are met for an exemption from withholding tax.

Debt restructuring

The complexities of debt restructuring are often on a sliding scale. We can review:

• Proposed or newly implemented financing arrangements, to make you aware of any potential interest disallowances required when calculating taxable profits
• The costs incurred in obtaining the financing, to advise you on whether and how they can be deducted when calculating taxable profits

Bringing structure onshore

Historically, there have been advantages to using offshore tax resident and incorporated entities. Recent legislation changes have started to minimise these advantages, and in some instances the costs of running the offshore entity can outweigh the benefits.

We can help by:

• Bringing offshore structures onshore and into the charge to corporation tax
• Advising on the impact of onshoring the structure from a UK tax perspective
• Liaising with HMRC to notify them that the structure has been brought into the charge to UK corporation tax
• Collaborating with non-UK firms in our AGN International association to advise on the local tax implications of the onshoring

VAT implications of international expansion

VAT advice for businesses engaging in international trade particularly those affected by Brexit and the EU e-commerce changes.

Vendor tax initial thinking

We can advise sellers of the tax implications of a business sale.

If preliminary terms have been agreed, we can recommend different and more tax efficient methods of structuring the deal.

Vendor tax deal support

We can assist the corporate M&A teams in structuring the deal so that it is tax efficient for the sellers and purchasers.

Where appropriate, we can produce a report which outlines the recommended structure with a step-plan for achieving it.

Where the transaction is cross-border, we can collaborate with our fellow advisers in AGN International, to provide local advice.

We can also review tax warranties and indemnities included in the SPA.

Employee ownership trusts

Sale of a company to an EOT is an increasingly popular form of tax planning. Broadly, this method of sale allows for the profits from the sale to be exempt from capital gains tax if certain requirements are met.

We can guide you through these requirements and plan the sale, liaising with lawyers to ensure a smooth process. We can also assist in reporting and disclosing the sale to HMRC.

Financial due diligence

Checking financial information prior to deal closure.

Tax due diligence

We can assist with mergers and acquisitions (M&A) by undertaking the tax due diligence review of the target entity, on behalf of the purchaser. Depending on scope, this involves a review of the corporate tax returns submitted to HMRC and enquiries into the PAYE and VAT affairs of the target.

Our report will highlight potential risks and changes which would arise from the deal: usually in relation to the use of losses and claiming of R&D tax relief.

Deal structuring: tax

We can assist the corporate M&A teams in structuring the deal so that it is tax efficient for the sellers and purchasers.

Where appropriate, we can produce a report which outlines the recommended structure with a step-plan for achieving it.

Where the transaction is cross-border, we can collaborate with our fellow advisers in AGN International to provide local advice.

We can also review tax warranties and indemnities included in the SPA.

Personal tax planning around sales

Advising sellers of the tax implications of a business sale.

International expansion

International expansion can be a big next step for growing businesses and comes with a plethora of unknowns.

We can discuss your plans with you and propose methods of structuring the expansion so that it is done in the most tax-efficient manner. We would look to produce a report, with the assistance of other member firms in our AGN International association, to set out the direct, indirect and employment tax implications of the proposed expansion with the aim of giving you the information required to make an informed decision. We can work with AGN colleagues to put in place the best structure for the expansion, dealing efficiently with the corporate implications.

VAT implications of international expansion

VAT advice for businesses engaging in international trade, particularly those affected by Brexit and the EU e-commerce changes.

Individuals holding crypto

We start by building an understanding of your reasons for holding cryptocurrency and other digital assets, and by exploring whether holding cryptocurrency personally is your most tax-efficient option.

We can review your activity to judge how your crypto income should be taxed and help you complete your annual personal tax return.

Where your crypto investment has generated significant wealth, we can advise on structuring your investment of that wealth with tax efficiency and multigenerational tax planning in mind. Our associated company BKL Wealth Management are happy to collaborate.

Corporates holding crypto

We can advise on the corporate tax implications of holding cryptocurrency and other digital assets, and provide guidance on the structuring of crypto investments within a group of companies.

Where your profits on crypto investment are significant, we can recommend tax-efficient ways of structuring the investment of the profit in less risky assets. Our associated company BKL Wealth Management are happy to collaborate.

R&D (research & development)

R&D tax relief allows companies to claim enhanced deductions on their expenditure on activities which make scientific or technological advances.

We can help by:

• Identifying whether there has been R&D expenditure incurred by your company and under which scheme the R&D claim can be made.
• Calculating the amount of R&D expenditure available to include in the tax return
• Preparing the report required by HMRC to support the R&D claim

Patent Box

If your company has revenues attributable to intellectual property held in the UK, these profits may qualify for lower rates of corporation tax. To correctly identify and record these revenue streams and attributable costs, ongoing accounting practices will usually need to be put in place.

We can help by:

• Identifying cases where the lower corporation tax rate can be applied
• Planning how the required information is captured
• Reporting the income to HMRC to ensure the correct amount of corporation tax is paid

Capital allowances and super deductions

Relief for capital expenditure incurred in a period is given as capital allowances. These allowances differ depending on what assets have been purchased.

We can assist in analysing proposed or actual expenditure to guide you on the tax reliefs available. This is usually done via report explaining the capital allowances and their availability, and then an analysis and categorisation of the expenditure. The analysis can then be provided to HMRC alongside the tax return for the period.

Holding company insertion

Before a holding company can be inserted above another company (e.g. to protect assets from trading risk), we recommend seeking clearance from HMRC to ensure there are no gains arising for shareholders on the insertion.

We can help with:

• Obtaining clearance from HMRC
• Inserting the new holding company

Preparation of the required board minutes, statutory filings and stamp duty exemption returns

Demergers

The process for splitting a group of companies, or removing certain entities, can be complex and requires tax and legal advice.

We can help by:

• Reviewing the proposed transaction and creating a plan
• Setting out the tax implications for the shareholders
• Suggesting points which may require additional commercial consideration
• Working with your lawyers to ensure that the necessary documentation is prepared to enact the steps in the plan

Trade hive-up

After an acquisition, it is normal for the new owners to wish to move the trade from the company they purchased to the holding company placed above it as part of the transaction structuring. This leaves behind any unknown liabilities and provides peace of mind to the new owners.

We can help by:

• Ensuring that no unexpected tax liabilities arise as a result of the transfer of the trade and assets by preparing a tax analysis and plan
• Managing the drafting of the required paperwork by your lawyers
• Implementing the plan

Share buybacks (capital treatment, income treatment)

When a company buys back the shares from an exiting shareholder, the gain on the share sale for the individual will either be taxed under the income tax rules or capital gains tax rules. Where capital treatment (and therefore lower tax rates) is to be applied, we recommend seeking clearance from HMRC prior to the transaction being undertaken.

We can help by:

• Drawing up the clearance and subsequent buyback notification with HMRC
• Preparing and filing the appropriate paperwork with Companies House
• Working with your lawyers as they prepare any legal agreements required as part of the share buyback
• Notifying HMRC of the buyback once it has occurred

Capital reductions

Reductions of capital to make it distributable are usually undertaken to return excess capital to shareholders, or to reduce negative P&L reserves which are causing a dividend block. They tend to be part of a larger piece of tax consultancy work.

We can support your lawyers as they draw up the legal documentation required for a capital reduction (a declaration of solvency and board minutes supporting the reduction of capital).

Family company reorganisations

We can help with grouping entities owned by families in order to rationalise their investment structure.

Pre-residence planning (coming to the UK)

Before you move to the UK, we can assist in reviewing your financial position, planning and structuring wealth/income/gains, to reduce the likelihood of unexpected UK tax liabilities.

Leaving the UK

Before you leave the UK, we can review your current tax position and advise on the implications of your move, as well as assisting in structuring your wealth/income/gains prior to leaving the UK so to help mitigate any taxes arising.

As an AGN International member firm, we can collaborate with fellow advisers in over 80 countries.

Tax nomad status

We can review your current tax position and advise on the implications of a change to tax nomad status (being resident for tax purposes nowhere) and the tax residence rules that may apply in countries where you plan to live and/or work.

As an AGN International member firm, we can collaborate with fellow advisers in over 80 countries.

Funding method advisory

Review of funding options and provision of valuations and cashflows needed to create a deck to provide to potential investors.

EIS and SEIS

Capital raising method for companies generally less than either 2 or 7 years old.

We can explain the tax benefits of individuals making investments in the company, as well as the potential pitfalls of EIS and SEIS. We can put the schemes in place, with the optional addition of advanced assurance (which we recommend).