UHY Ross Brooke Chartered Accountants

How we turned a £25,000 tax bill into a £30,000 tax rebate

Our tax manager Claire was recently approached by an individual who had realised a capital gain of approximately £100,000 and was faced with a forthcoming tax liability of approximately £25,000. His friend had recommended him to Ross Brooke and he asked us if there was any way that he could mitigate the tax payable?

After checking the facts, the client’s plans and his risk profile, we explained how an investment into an Enterprise Investment Scheme might meet his objectives.

We explained that the tax benefits of investing in such a scheme were threefold.

  • Firstly, the gain that he was due to pay tax on could be rolled over into the investment and as a result the capital gains tax liability could be deferred;
  • Secondly, providing the investment was kept for 3 years, there would be no capital gains tax payable on any eventual profit on realisation of the investment;
  • Thirdly, the shares usually qualify for 100% Business Property relief from Inheritance Tax;
  • Finally, the investment would qualify for 30% income tax relief ie his end of year income tax bill would be reduced by £30,000.

Obviously he was delighted with the result. He entered our office with a potential £25,000 tax bill and left with a potential tax rebate of £30,000.

Why not speak to one of our tax team to see if an Enterprise Investment Scheme could benefit you?

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