Constructive tax advice, with commercial objectives always in mind.
OneE pride ourselves on our extensive experience advising corporate clients, from family-run owner managed businesses seeking greater efficiency, to burgeoning multinationals considering international restructuring.
While each requires its own approach, we believe there’s little doubt that expert tax advice can be a key component to business success.
We firmly believe that our holistic corporate advisory service can add value in almost any client scenario, with profit extraction, planning for disposals and advice on restructuring as just a few key areas of expertise.
Whenever we may be needed, OneE are here to help your clients realise their commercial objectives, while enhancing the value of your practice.
For more information about how our tax advisory service may be of benefit to your corporate clients, please call us directly on 01204 559914 or send an email to firstname.lastname@example.org.
Some examples of past work are detailed below:
Case study 1 - Planning for Company Sale
The client asked us to assist with two key issues: firstly, how best to achieve tax efficiency on the disposal; and, secondly to understand, and deal with, any implications that historic tax planning (undertaken with various providers) may have on negotiations.
We proceeded by first reviewing the planning the client had previously undertaken, then setting out the client’s various options with regards to these potential liabilities by way of a briefing paper. This ensured that negotiations could be approached with the relevant considerations at the forefront of their mind. With our assistance the client was able to fluently discuss the previous planning and potential liabilities during negotiations. It was accepted that the purchaser would not be comfortable with some of the potential tax liabilities, and it was therefore agreed that settlement with HMRC would be pursued to facilitate a sale.
Our specialist Tax Disputes and Investigations team thereafter negotiated a settlement with HMRC, to ensure the most favourable terms were agreed. At the same time, the historic trust/offshore arrangements were also brought to an end by OneE, thus ensuring no further costs accrued in this regard.
In addition to resolving the previous planning, the on-going commercial negotiations made it imperative that any planning being considered on the disposal must not hold-up negotiations. We therefore recommended an initial reorganisation of the group in order to get to a position whereby the disposal would be eligible for substantial shareholdings exemption (SSE). Detailed advice was provided on the availability of this relief and a clearance application was provided to best ensure the disposal took place in a tax-neutral manner.
Following the sale, a Company Share Trust (CST) was established, which was carefully drafted by leading counsel to make use of statutory reliefs, allowing a gift of the shares into trust to take place without incurring a charge to tax. Thereafter the shares were held in a more favourable tax jurisdiction. Once the funds were extracted from the company to the trustees, loans could be taken from the structure by the beneficial owners. Thus the client gained access to the proceeds of sale in a highly tax efficient manner.
Case study 2 - International Business Structuring
The client expressed an interest in structuring the purchase, and their international business operations more generally, in such a way as to ensure long-term tax efficiency for continued growth.
The report outlined various structures through which the company could be acquired, explained how the transfer pricing rules would apply and could be navigated (providing worked examples of potential efficiency savings), and also detailed the benefits of utilising an offshore trust as an efficient extraction mechanism.
Following further discussion, a combination of a trust and corporate structure was agreed upon, in Cyprus and Malta respectively. The Maltese company would acquire the manufacturer, purchasing supplies and selling them on to the UK subsidiaries at a healthy margin, underpinned by the appropriate transfer pricing methodology adopted.
The Maltese company could then pay dividends to the Cypriot trust (as shareholder), reducing the effective rate of corporation tax payable on the profits. Funds could thereafter be extracted through commercial loan arrangements between the trustees and the client. The trust was also settled by the client’s non-UK domiciled family member, thus securing inheritance tax benefits.
Given the favourable corporation tax treatment of companies in Malta and trusts resident in Cyprus the client was happy the structure would meet their long-term objectives in ensuring profits arose commercially and justifiably in a jurisdiction with favourable tax treatment.
Case study 3 - Securing Entrepreneurs' Relief on a connected disposal
Our review and interpretation of the partnership agreement led us to believe that the majority of the value in the LLP was held by the individual members. Although the partnership interests of these members did not grant them a particularly large share to income, they were granted the majority voting rights, resulting in the individual members having de facto control over the decisions of the LLP. It was therefore understood that a disposal of these interests to the corporate member would facilitate extraction of a significant cash balance.
We therefore instructed, on behalf of the clients, a professional valuation to confirm that our understanding was correct and to identify the monetary value of the relevant interests. Once received we then set about exploring how the tax burden on disposal could be mitigated, exploring the potential availability of Entrepreneurs’ Relief (“ER”) to secure a tax rate of 10% on the disposal proceeds. Although the clients were unaware that partnerships could also benefit from ER, we held that, with careful structuring, we could secure ER on the disposal and provided advice including a detailed analysis including case law in support of our view. The issue of a connected party purchasing the interest was also dealt with in our advice, with the strong valuation supporting a market value disposition was to take place.
Additionally, we advised on how the consideration for the purchase could be structured through the issue of loan notes by the connected company, thus ensuring future tax-efficient drawdown of profits from the company by the individuals. We liaised with the clients’ advisors throughout the process to ensure that the disposal was structured in the preferred way. The clients were thereby able to obtain tax efficient extraction in through the appropriate use of statutory reliefs.
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