Introduction:
Companies with taxable profits have 2 options open to them with regards to tax planning. The first option is to use our "extraction planning" - which uses HMRC Approved planning to move money out of the company. The second option for the company is to make a "corporate investment" that retains funds within the business, but also generates an immediate tax benefit.

With the investment option, there are two main considerations - how secure is the investment vehicle, and how do the tax breaks work? As you would expect - we only offer the very best of investments, with both a secure track record AND HMRC Accepted Tax breaks. One of the investments uses Pre-Approved Corporate Venturing Scheme (CVS) reliefs.

Of course it is possible to combine investments with extraction! A Company could use the investments to trigger tax relief in a non-contentious manner, then extract residual funds into a fully HMRC Approved structure - which could then be used to make payments to Directors without income tax or NIC (Saving considerable amounts of money).

5 Year Partnership Investment:
By making an investment into a special LLP, the company can claim significant year 1 tax concessions (s.393A ICTA 1988)- and at the same time, look forward to an income stream from the LLP in years 2-5. The providers of the LLP have a very a strong track record and have raised in excess of £5 billion. The next LLP will be closing in March 2010.

The following is a simplified cashflow forecast:

Case Study - ABC Limited with £1,500,000 Taxable Profits:   Without Investment With Investment Year 1 Profits £1,500,000 £1,500,000 Total Capital Invested into LLP £0 £259,048 Accounting Loss Arising from investment (Which does not involve any loans to "gear up" as with some arrangements on the market) £0 (£1,200,000) Taxable Profits £1,500,000 £300,000 Corporation Tax (28/21%) £420,000 £63,000 Distributable Cash £1,080,000 £1,177,952 Years 2-5 Post Tax Profits from Investment (Full details of how this has been calculated will be provided within the official Information Memorandum on request) £0 £101,333 Additional Cash Available: £0 £199,285 PERSONAL TAX FOR DIRECTOR TAKING DIVIDENDS: Dividend Paid Out: £1,080,000 £1,177,952 Income Tax (25% effective rate): (£270,000) (£294,488) Net Cash Available to Director (Ignoring the additional £101,333 potential profits in yrs 2-5) £810,000 £883,464 PERSONAL TAX FOR DIRECTOR TAKING LOAN FROM HMRC APPROVED FUND: Available Cash: £1,080,000 £1,177,952 Percentage Increase compared to "normal" Dividends (Again this ignores the additional £101,333 potential profit on the investment, which adds a further 12.5%): 33.3% 45.42%

3 Year PLC Investment:
In this case, the company investor will be buying qualifying shares in a PLC. The investment in these shares is Pre-Approved (CVS Relief) and generates a corporate "tax credit" (20% x £investment amount). In addition to the tax credit, the investor will also receive tax relief on loan interest payments - without having to actually make these payments.

This investment is available through a provider with a very secure business model. They have been offering this to individuals as a secure Enterprise Investment Scheme (EIS) - and are now offering it to Corporate investors to make use of the CVS reliefs.

The following is another simplified cashflow forecast:

Case Study - XYZLimited with £200,000 Taxable Profits:   Cash Investment Financed Investment Gross Investment into PLC (£100,000) (£100,000) Loan organised by Provider £85,000 £85,000 Bridging Loan from Investor's Resources (N/A) £15,000 Interest Costs on Investor's Loan (N/A) (£700) Net cash from Investor (min = £7,500) (£15,000) (£700) Corporation Tax Credit @ 20% £20,000 £20,000 Net Current Year Cashflow Benefit £5,000 £4,300 Projected 3 Year Minimum Return (Full details of how this has been calculated will be provided within the official Information Memorandum on request. This example assumes just enough profit to pay off the loan and all interest. However it is possible that there will be MORE profit than this, and hence an additional benefit) £102,000 £102,000 Loan Capital Repayment (£85,000) (£85,000) Loan Interest Repayment (£17,000) (£17,000) Corporation Tax Relief on Loan Interest (Assumes 21% relief on accrued interest) £3,750 £3,900 Gross Return on Investor's Cash Invested/Deployed: 166% 1,357%

Summary:

Whichever option is required (company investment or cash extraction) - we have access to the very best providers, allowing secure and effective tax planning for companies with profits of all levels.

Contact Us NOW - For more information.

Please note: We are not investment or pensions advisors, so anything you read on this web site should not be taken as formal investment or pensions advice.

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