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12 April 2011

Issue: 4300 / Categories: Forum & Feedback , Companies , Income Tax

A family – parents and three sons – trade as a dairy-farming partnership and are considering the introduction of a limited company to mitigate their income tax liability

I act for a profitable dairy farming partnership which consists of five partners (the parents and their three sons). The land and farmhouses are owned jointly by all five partners and are farmed under a gratuitous licence.

Profits are approximately £300 000 per annum and I am considering introducing a limited company as a partner to help reduce their income tax liability. Views would be welcome on the following aspects.

First should I be concerned at the loss of the £100 000 annual investment allowance which from 6 April 2012 will only be £25 000?

Secondly is a commercial purpose for the introduction of the limited company required? If so do readers have any suggestions/examples?

Thirdly as profit is allocated to the company a cash balance will arise in the...

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Corporate partner

© Copyright LexisNexis 2024. All rights reserved.

12 April 2011

A family – parents and three sons – trade as a dairy-farming partnership and are considering the introduction of a limited company to mitigate their income tax liability

I act for a profitable dairy farming partnership which consists of five partners (the parents and their three sons). The land and farmhouses are owned jointly by all five partners and are farmed under a gratuitous licence.

Profits are approximately £300 000 per annum and I am considering introducing a limited company as a partner to help reduce their income tax liability. Views would be welcome on the following aspects.

First should I be concerned at the loss of the £100 000 annual investment allowance which from 6 April 2012 will only be £25 000?

Secondly is a commercial purpose for the introduction of the limited company required? If so do readers have any suggestions/examples?

Thirdly as profit is allocated to the company a cash balance will arise in the...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Subscribe Now...

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.

Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

Issue:

4300

Categories: Forum & Feedback [1] , Companies [2] , Income Tax [3]

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