Optimising Tax and Asset Protection Through a New Group Company Structure

The Challenge

The director and shareholder of two successful trading companies wanted to invest the profits from these companies into a separate, wholly owned property investment company. The aim was to do so in a tax-efficient way, while also benefiting from grouping the companies together for greater operational efficiency.

The Solution

We recommended the creation of a holding company to establish a group structure. This would allow the client to transfer funds from the trading companies to the investment company in a tax-neutral manner, while also shielding the investment company from the risks associated with the trading operations.

Before proceeding with such a transaction, we advised obtaining clearance from HMRC to ensure the transfer wouldn’t be subject to tax. Following this we prepared detailed tax advice to ensure the client was fully aware of the tax implications and worked with the lawyers to ensure everything was implemented correctly.

The Value

The client agreed with our proposal, and we successfully secured HMRC clearance. The new structure now enables the client to easily and tax-efficiently transfer profits from the trading companies to the investment company, while effectively protecting the investment company from the risks of the trading operations.