It is natural for taxpayers to wish to minimise their tax liabilities as far as possible through careful legitimate tax planning.
At Seabrook Clark, we believe in sensible prudent tax planning using tried and tested methods. After all, saving £1 tax is worth just as much as an extra £1 investment return.
Our advice is focused on ‘main-stream’ tax planning, not tax avoidance so our clients operate within both the letter and the spirit of tax legislation.
Our starting point with tax is to ensure that our clients are making maximum use of tax reliefs and exemptions, such as the Income Tax personal allowance, CGT annual exemption, and Inheritance Tax Nil Rate Band, as well as tax-free investments encouraged by the government using ISAs. Pensions also benefit from a number of generous tax reliefs and generally form a central plank in a client’s tax planning strategy.
On the basis that clients have made appropriate use of tax reliefs and exemptions, ISAs and pensions, we give advice in the following areas to help clients save and mitigate tax:
Specialist investments with valuable tax reliefs
Enterprise Investment Schemes (EIS), Seed Enterprise Investment Schemes (SEIS) and Venture Capital Trusts (VCT) were introduced by the government to offer a series of potentially valuable tax savings. They are designed to help smaller higher-risk trading companies raise finance by offering a range of tax reliefs to investors who purchase new shares in those companies.
Tax savings on offer include income tax and inheritance tax relief as well as CGT deferral.
They are also a way of diversifying a portfolio to complement a client’s wider financial planning and risk profile since investments can be made in areas not commonly available for quoted investments.
No matter how generous the tax relief, we attach great importance to our research and due diligence to assess the investment proposition in its own right.
Our expertise is to advise on both the investment and tax aspects of EIS/SEIS/VCTs.
Typical EIS / SEIS Investment Sectors
(television, film, and video games)
We advise on investments which qualify for 100% Business Property Relief (BPR), meaning that 100% IHT can be saved after a 2 year holding period. To benefit from this valuable relief, investments must be in unquoted trading companies, which carry higher risks due to the smaller size of companies and no ready market to value or sell holdings. Our approach is to consider the investment risks and tailor to your individual circumstances. Typical investments, which can be listed on the Alternative Investment Market (AIM), are often in qualifying trading activities such as:
(eg solar and wind)
Land / Forestry
Business trading from freehold property
(eg hotels, health clubs, nurseries, care homes)
We advise on investments using a number of different types of trusts, which can save 100% IHT after 7 years. There are also some trust structures which provide for an immediate IHT discount.
The benefit of using a trust is that in addition to a potential IHT saving, a client can ensure that income and capital is preserved and can be passed to chosen beneficiaries at the appropriate time. This level of control is not possible with lifetime gifts. Also, a trust can be invested in mainstream investments so risk can be managed and tailored accordingly.
Our advice in this area typically includes an assessment of the current IHT position, an appropriate Will and Lasting Power of Attorney (LPA), the potential for lifetime gifts or philanthropy/charitable gifts, as well as an action plan, including advice on care fees.
Life policies can be written in trust to cover a potential IHT liability. Whilst this does not reduce the IHT bill, it provides beneficiaries with the funds to pay the tax.
We advise on asset protection to help preserve and protect family assets over time, so your estate passes to your chosen beneficiaries at the most appropriate moment. This may include a family trust, which can allow children to benefit during your lifetime, whilst protecting wealth from the risk of being dissipated on divorce.