Highlighted below are a few recent examples of the work carried out by our Hazlewoods tax team and savings achieved for our clients.
Landowners entering a promotion agreement to sell land with planning permission
Background: We were approached by a land agent who was acting for the landowners, as we had previously informed him of tax issues arising with land pooling arrangements. The initial proposal was for an equalisation agreement to be put in place to split the proceeds amongst the landowners according to the proportion of land being put into the scheme by each of them.
How we helped: The proposal for an equalisation agreement is ineffective and results in double taxation. We, therefore, provided advice on an alternative structure ensuring tax was only paid once. We were able to give the technical and complex advice in a way that all landowners could understand, offering one to one meetings to help guide them through the process. The planning put in place helped to save £2.8m in capital gains tax across all landowners.
Care home business with a cumbersome structure
Background: We were approached by the owner of a care business to look at his current trading structure and provide tax advice. He operated two stand alone companies and an LLP, which held property from which the companies trade. Rent was then charged by the LLP to the companies for the property. The structure was incredibly tax inefficient for inheritance tax, income tax and capital gains tax purposes.
How we helped: Our review resulted in restructuring which, based on the current values, has saved over £800k in inheritance tax exposure, over £460k in capital gains tax and over £160k per annum in income tax.
Software development company - R&D tax credits and full tax integrated service
Background: We were approached by a venture capitalist to provide advice and assistance to a software development company operating in a niche market. The company was struggling financially and needed some immediate professional support.
How we helped: From initial meetings, it became clear that the company was eligible to claim substantial R&D tax credits which would assist with its cash position. We assisted the company in preparing an R&D tax credits claim as a priority; we have helped the company to claim almost £300,000 in R&D tax credits since our engagement.
Engineering company – patent box
Background: The company is a UK member of a large US multinational conglomerate. It manufactures substantial items of equipment comprising multiple complex assemblies, mainly for the automotive industry. Individual sales are often for multi-million pound sums.
How we helped: Hazlewoods Innovation Team advised the company in developing a suitable methodology for its Patent Box calculation. Hazlewoods also initiated a meeting with HM Revenue and Customs to present the proposed methodology, and we have successfully secured their agreement to our proposals. The company’s first Patent Box claim should secure tax savings approaching £400,000.
Wealthy family – Inheritance tax planning
Background: We act for a wealthy family with a family investment company, property and personal investments. The parents face a significant inheritance tax liability and the family wanted to minimise their exposure as far as possible.
How we helped: We helped the family plan for the future ensuring that enough income was maintained presently whilst implementing planning to ensure inheritance tax would be minimised in the future. At the same time we worked closely with the family solicitor to ensure tax efficient Wills were drafted. Potential inheritance tax savings of up to £1m may be achieved as a result of this planning.
Share options issue
Background: A senior executive in a UK subsidiary of a US company exercised some unapproved share options in the parent and paid income tax via his tax return. However, as these were listed shares tax and NIC should have been paid through PAYE. The situation was exacerbated by an extra income charge such that the total tax at that stage was just under £1m.
How we helped: The existing advisers accepted HMRC’s position but we felt it was worth challenging on various technical grounds. After protracted negotiations a tax saving of around £400k was achieved.