Retirement relief: planning makes perfect

Article Abstract:

Proprietors of family companies in the UK can realize substantial relief from the capital gains tax from retirement relief. Planning is essential for retirement relief as it may be denied on technicalities: 10 years before retirement is the proper threshold for planning. Shareholders with an equity interest in family-held companies typically can gain retirement relief if they dispose of their shares in the company upon reaching the age of 60 or older, or earlier if they must retire due to ill health. The taxpayer seeking retirement relief must be a full-time working director of the company, and the taxpayer's company must be a family company. For a company to be considered a family company, the taxpayer must have a minimum 25% stake of the voting rights or more than 50% if jointly held by the taxpayer and family members, of which at least 5% must be in the taxpayers' own possession.

Retirement planning, Capital gains tax, Family-owned businesses, Family corporations

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Company loss carry back relief

Article Abstract:

The newly issued UK Finance Act of 1991 (FA 1991) allows business enterprises to carry a trading loss back against its taxable profits of the previous three years. The new regulations offer loss relief to companies experiencing financial difficulties. Previous regulations only permitted companies to set back their trading loss against the profits of the preceding year. The operations of FA 1991, and its administrative aspects, are reviewed.

Interpretation and construction, Tax law, Business losses

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Elect to de-pool for faster relief

Article Abstract:

British tax law allows acceleration of tax relief by 'de-pooling' assets; excluding plant and machinery from a company's main asset pool by treating them as 'short-life assets'. There are some practical problems to de-pooling, such as identifying individual assets, but these can be overcome by computing the average actual life of such assets. Methods are discussed of electing to de-pool and calculating short-life assets.

Tax reform, Pool of capital investment doctrine (Taxation)

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