Background: A client was recommended to us due to our expertise in agriculture. The client operates a mixed farming partnership, which includes arable land, potatoes, and beef production. The client’s business has been consistently generating annual taxable profits over £500,000 and they approached us seeking ways to mitigate their annual tax liability.
How we helped: We reviewed the trading position and identified a distinct profitable enterprise within the business. We recommended an incorporation of this part of the business to reduce the marginal rate of tax from the higher personal taxes rate of 42%, to the corporation tax rate of 25%. By doing this, we saved the family approximately £100,000 in tax in the first year alone, without impacting the inheritance tax position of the existing partnership.
