Buy and Build Ep 48: Tax Efficient Strategies for M&A and Employee Incentive Schemes with Sarah Gardner [Founder: Allegro Tax]
11 snips
Sep 5, 2022 AI Snips
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Using a Holding Company
- Use a holding company when buying a company to potentially avoid capital gains tax on future sales of shares.
- Extract funds as dividends or bonuses when needed, but reinvest proceeds tax-free.
Personal vs. Holding Company
- Buying a company personally may be simpler for one-time acquisitions if you plan to sell it later.
- Consider business asset disposal relief (BADR) for a 10% capital gains tax rate versus income tax on dividends.
Holding Company Advantages
- Holding companies offer benefits like tax-free dividends from subsidiaries, asset transfers within the group, and loss sharing between companies.
- Consider your individual circumstances and long-term goals when deciding on a structure.