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The treatment of surplus cash in a company.
KEY POINTS
- Consider the company’s trading status for entrepreneurs’ relief.
- The use of a holding company should be considered to provide basic asset protection from the trading company.
- Investment business demergers could also be considered.
- A company above the trading company could own income-only shares in the trading company or group.
When is the level of surplus cash in my company too high to cause me a tax problem? This is a common question asked by many a trading company client over the years. Readers will be familiar with this discussion but it should be considered from a tax and commercial basis because focusing purely on tax may be a costly mistake in the long run.
The answer to the question of surplus cash is the classic ‘well it depends’. This elicits a collective groan from...
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