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Big extraction

11 October 2011 / Jack Hollyman
Issue: 4325 / Categories: Comment & Analysis , Business , Companies , Income Tax
JACK HOLLYMAN considers various ways of mining profits from a corporate partner


  • Using a corporate partner or service provider can mitigate higher-rate income tax liabilities.
  • Use dividends when future income is lower.
  • Extra-statutory concession C16 is due to end.
  • Loans to director shareholders can be tax efficient.
  • Business property relief will be lost if the company is not mainly trading.

Bringing a corporate partner into a partnership is a widely used strategy for mitigating tax on business profits as they arise. As long as the potential traps are safeguarded against (transfer of income streams settlements commercial justification etc.) the tax savings can be huge.

The problem is that corporate...

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