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A company structure designed to grow family wealth, protect assets, and build long-term investment portfolios.
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Lifetime Business Tax Plan
A strategic tax framework that reduces liabilities, safeguards assets, and supports sustainable business growth.
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FAQs
What are Lifetime Business Tax Plans?
A Lifetime Business Tax Plan is a packaged solution, exclusively for company directors, that enables them to solve multiple problems for their business and offers tools to:
- Solve the immediate threat of a 40% tax penalty on surplus company cash
- Transfer in company and pension cash to create significant liquidity
- Protect family wealth and assets
- Secure inheritance of company shares
- Achieve wider investment choices in a low to zero tax plan
- Create lifetime and beyond tax and inheritance strategies
- Fund your business
- Create succession plans
- Grow the retirement fund
- Invest in property
Lifetime Business Tax Plans encompass two major components; the Family Investment Company and the Small Self-Administered Scheme (SSAS). These exclusive tax mitigation plans also allow directors to transfer in former work pensions that are frozen or unmanaged. The transfer of company cash and former pension cash into one plan can create significant liquidity, providing wide investment choice in a low to zero tax plan.
Do HMRC recognise Lifetime Business Tax Plans?
Yes, because legislation has created the components.
- The Family Investment Company is recognised by HMRC as a standard way of preserving family assets for future generations whilst mitigating any tax.
- A company tax-exempt savings account, technically known as a SSAS (Small Self-Administered Scheme), is also recognised by HMRC as a standard form of investment savings vehicle for a company.
Both of these essential components of the Lifetime Business Tax Plan need to be registered with HMRC and annual compliance reporting is required to notify them of the assets held and the returns generated, albeit no tax will be due.
What is a Family Investment Company?
Recognised by HMRC, a Family Investment Company is a standard way of preserving family assets for future generations whilst mitigating any tax. As a special type of subsidiary or standalone company, this gives you the power to invest your company profits and surplus cash in property, stocks, and/or many other asset classes. An Family Investment Company has a high street bank account, similar to your current business account, and from this account you then control how the money is invested.
What is Business Property Relief?
Put simply, Business Property Relief is a tax relief for business owners, relating to assets such as business premises, shares, machinery, other property and more. This relief is in place to reduce the amount of inheritance tax due on business assets. Like anything tax related, there are complications and rules, dependent upon your individual business and situation. Complex understanding is required but with the right support, this can be taken advantage of, and other strategies and tools can be used in alignment with this understanding. By claiming business property relief, you are essentially reducing the value of the assets for inheritance purposes in line with HMRC rules.
What is the difference between a trading company and an investment company?
The difference between a trading company and an investment company is fairly straightforward in the eyes of HMRC. A trading company must not use its surplus cash for investment purposes whereas the business of a trading company consists of income made, mostly in making investments. To determine whether your company is a trading company or an investment company, you can apply a series of 20% tests. The tests determine whether the cash held within your company represents more than 20% of the balance sheet, or more than 20% of the turnover or even the profit. HMRC have been known to win first tier tax tribunals as a result of the directors investing more than 20% of their time managing investments. An example of this could be where a director has a share dealing account and spends much of their time managing this rather than focussing on the trade of the company. You can read more in our guide
What is the 20% rule in relation to Business Property Relief?
The 20% rule is a good way of assessing the point at which HMRC will determine your company is a trading company or an investment company.
• Less than 20% of your trading company’s income will come from investment activities,
• Less than 20% of your company’s expenses will relate to investment activities,
• Your role within the company is such that no more than 20% of your time is spent on investment activities
• Investment of less than 20% of assets may take place
The 20% rule is explained further in our free guide to the Lifetime Business Tax Plan – download link
What constitutes surplus company cash?
Surplus company cash is the amount of cash held by your company that exceeds the amount that is required for day-to-day trading operations of your company. It is extremely important to constantly evaluate surplus company cash and how you use it as if used in an investment capacity or even if just held dormant, it is subject to HMRC tax liabilities.
What can a Lifetime Business Tax Plan invest in?
A Lifetime Business Tax plan can invest in a wide variety of asset classes, including:
- Commercial property
- Hands off property investment
- Your own business
- Stocks and shares
- Property development loans
And much, much more
Why not learn more from one of our free guides?
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Paul Reid
01.09.2024
I am nearly through the setup process for my SSAS. HMRC have taken about 12 weeks to approve the scheme. TLPI have been quick in getting the SSAS setup process started and have monitored the HMRC approval, responding to questions HMRC asked. TLPI prepared the new bank account application and pension transfer request, ready to submit upon HMRC approval, of the SSAS. Time to complete the setup is as short as possible with TLPIs proactive setup process.
Kenneth Irabor
21.08.2024
I am incredibly pleased with the service provided by TLPI in setting up my SSAS pension. The team was professional, knowledgeable, and supportive throughout the entire process. They guided me every step of the way, ensuring that everything was handled smoothly and efficiently. Thanks to their expertise and commitment, I've already seen an initial successful investment, which has given me great confidence in their abilities. I highly recommend TLPI to anyone looking for top-notch support in managing their pension and investments.
Tommy Meads
19.09.2024
We used Jordan @ TLPI to set up a family trust for our company to purchase a commercial property. He was efficient, informative and professional every step of the way. If there were any queries during the whole process they were resolved promptly. This was our first dealings with family trusts and TLPI's guidance during this time was highly valued! I would highly recommend them!
Liam Thomas
15.08.2024
Jordan looked after us incredibly well from start to finish. Dealing with tax can be a complicated process but Jordan simplfies everything and takes the time to answer all of your questions in detail. Would highley reccomend.
Richard Smith
11.07.2024
TLPI provide a brilliant service full stop. From our initial conversations they have been extremely helpful, diligent and thorough. I can't thank them enough for their advice, pointers and guidance that they have provided so far. They have made something which to me is extremely complex and confusing feel very straight forward.
Cris Emson
29.05.2024
I much appreciate the help and guidance TLPI have given me in setting up a Family Investment Company, and now we have reached the end of the first year we are now preparing the first set of annual accounts. Again TLPI are proving invaluable is giving help and advice, and I am sure none of this would be possible without their expert support.
Keith Jones
17.08.2023
Tlp have been fantastic with there advice and help in setting up my retirement plans , putting structures into place to help with future generational hand over of assets, great advice from Jordan Sharpe, easy to deal with and always on hand for help when needed, well done all, 👏 ✔️
Big thanks to sue for all your outstanding work, sue kept me updated with my pension transfer every step of the way, I would have no problem referring them on to anyone who needs sound advice and financial pension planning, thanks again for all your help,
Vipin Varsani
03.08.2023
Very helpful through the whole process and after.