It is easy to overlook SDLT when incorporating a company. Peter Rayney explains how to handle this issue in practice.
The UK’s penal income tax rates have encouraged many businesses to incorporate. Where the business owners or partners tend to retain a large part of their profits these can be taxed at much lower rates within a company structure enabling more funds to be ploughed back for working capital etc.
The vast majority of incorporations tend to be based on selling the business goodwill at market value. Provided a reasonable and justifiable goodwill value can be agreed with HMRC's Shares and Assets Office the proprietors/partners are able to start off with a significant credit balance on their loan accounts. This will provide them with a tax efficient mechanism for extracting funds from the...
