Kuits Solicitors

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Kuits acts for Paul Scholes on new column for Paddy Power10-Jun-2014

Manchester law firm Kuits has advised on the negotiations surrounding Paul Scholes’ contra..

Ban on the sale of alcohol below the cost of duty plus VAT28-May-2014

On 28th May 2014, a government ban on the sale of alcohol below the cost of duty plus VAT came i..

Kuits advises on Ledley King Testimonial at Spurs09-May-2014

Manchester law firm Kuits Solicitors has advised on the negotiations surrounding the testimonial..

Update: Mis-selling of swaps08-May-2014

Kuits has been in close contact with those of our clients involved in the Financial Conduct Auth..

Family Justice Reforms23-Apr-2014

The family justice reforms, which have been described as “the largest for a generation&rdq..

New Consumer Contracts Regulations – Is Your Business Prepared?23-Apr-2014

The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 will ..

Kuits advises Accurist on sale of its business to Time Products11-Apr-2014

Kuits Solicitors, the leading commercial law firm based in Manchester, has advised Accurist Watc..

SSP Reforms: The Impacts on your Business04-Apr-2014

Starting from April 6, the introduction of an independent assessment service means that employer..

Game Changer For Landlords 24-Mar-2014

Until recently the law in administrations was that if a quarter’s rent is payable in advan..

Distress not an option for commercial landlords19-Feb-2014

One of the most effective options available to landlords of commercial property in the event of ..

Does your business need a BYOD policy?19-Feb-2014

BYOD (bring your own device) refers to the increasingly common practice of employees using perso..

Government issues guidance on international surrogacy19-Feb-2014

Surrogacy is becoming increasingly popular with couples who wish to grow or start a family. Man..

CRAR UPDATE18-Feb-2014

This Bulletin should be read in conjunction with the website article Time is Ticking (http://www..

Pre-Nuptial Agreements – soon to become legally binding?10-Feb-2014

The Law Commission is set to publish a report on Matrimonial Property, Needs and Agreements on 2..

TUPE 2014: 5 KEY POINTS FOR EMPLOYERS07-Feb-2014

The latest revisions to TUPE* are in pale contrast to sweeping changes first talked about in Jan..

Discretionary bonus payments and divorce05-Feb-2014

In the event of divorce or dissolution of civil partnership, one of many financial Orders that t..

Daily Internet Purchases Namehog 27-Jan-2014

Manchester Solicitors Manchester law firm, Kuits Solicitors has advised AIM listed internet host..

Kuits Shortlisted for Medium Law Firm of the Year 24-Jan-2014

Manchester Solicitors Kuits Solicitors in Manchester, England has been shortlisted for the Mediu..

Understanding Surrogacy23-Jan-2014

Things to know when considering surrogacy Many couples are turning to surrogacy as a way t..

Advice for companies and individuals on reputation management and brand protection14-Jan-2014

Overview The Defamation Act 2013 is in force as from 1 January 2014. It is intended to p..

Do you own the rights to your name? 14-Jan-2014

A recent EU ruling has determined that social media company Pinterest do not own the rights to t..

Swaps - Where are we now?10-Jan-2014

We have recently concluded some swaps cases for clients of ours with encouraging six-figure sett..

New Year – New Beginning?06-Jan-2014

Today has been dubbed “Divorce Monday” by the media on the basis that this is report..

Safe Harbor – Any Port in a Storm?06-Jan-2014

Does your business operate or trade internationally? Most companies are aware that they must com..

Government publishes response to its consultation on apprenticeships in England18-Dec-2013

The Government has announced that the existing apprenticeship frameworks are to be replaced by n..

Domino’s Pizza workers told to speak English while at work12-Dec-2013

Staff at Domino’s Pizza in Preston were told that they could only speak English while at w..

Kuits advises on the opening of Cafe Football11-Dec-2013

Manchester Solicitors Manchester law firm Kuits Solicitors is advising Gary Neville and Ry..

Autumn Statement overview06-Dec-2013

Manchester Solicitors Growth Forecast to increase from 0.6% to 1.4%, with next year’s predi..

Christian Woman Mounts Landmark Case at Court of Appeal 06-Dec-2013

A Christian care worker, Celestine Mba, has sought a ruling from the Court of Appeal allowing he..

Christmas and New Year Opening Times06-Dec-2013

Date Times Open/Closed Tuesday 24th Dec ..

HMRC Clamps Down on Landlords06-Dec-2013

HMRC has launched a Let Property Campaign aimed at landlords who let out residential property wi..

It’s all in the Name06-Dec-2013

As part of the ‘Red Tape Challenge’ to reduce the raft of unnecessary regulations im..

HMRC to carry out targeted checks on employers advertising for interns05-Dec-2013

HMRC crack down on unpaid internships HMRC has written to more than 200 employers who have rece..

Kuits advises on 'Class of 92' production02-Dec-2013

Manchester Solicitors Manchester law firm Kuits has advised on the agreement to produce a major ..

Bulletin Article – Age Discrimination/John McCririck28-Nov-2013

John McCririck's age discrimination claim dismissed A Tribunal has dismissed John McCririck&rsq..

What a Landlord does not want for Christmas28-Nov-2013

In the run up to Christmas there will be a real temptation for rogue traders to gain access to e..

Case Law Bulletin: Young-v-Young 27-Nov-2013

The long-awaited high profile “big money” divorce case of Young v Young finally reac..

Commercial Landlords – Time is Ticking20-Nov-2013

As from 6th April 2014 landlords will no longer be able to use the ancient common law remedy of ..

Employment Law – Winter 2013 Update19-Nov-2013

Severe Weather – How to Manage this for your Business As winter closes in empl..

Vantage Point sold for £19.9 million 19-Nov-2013

Manchester Solicitors Manchester law firm Kuits Solicitors have advised Manchester property inve..

Financial Penalties for Employers who lose at Tribunal18-Nov-2013

From April 2014 onwards financial penalties may be imposed upon employers who lose at Tribunal. ..

Charities Relieved by Court Ruling05-Nov-2013

Commercial Property Solicitors The Court of Appeal (in the “Pollen Estate” case) has..

Direct your Attention to Direct Marketing01-Nov-2013

Manchester Solicitors The Information Commissioner’s Office (ICO) has recently released ne..

Government Looks to Deregulate Entertainment Further01-Nov-2013

Government Announces Plans to Relax Entertainment Rules The Government announced on 23rd October..

Is the Break Tide Turning?01-Nov-2013

Property Litigation Solicitors When the break date within a rental agreement falls in the middle..

Payments to Incorrect Payees01-Nov-2013

Manchester Solicitors A recent case has offered comfort to banks that have processed CHAPs payme..

You can make a contract in two different places01-Nov-2013

High Court rules that a contract can be made in two different jurisdictions In the recent case o..

Kuits advises San Carlo on Selfridges opening31-Oct-2013

Manchester Solicitors Manchester law firm Kuits Solicitors has advised family run restaurant gro..

Kuits advises Daily Internet plc25-Oct-2013

Manchester Solicitors Manchester law firm Kuits Solicitors has advised AIM listed web hosting pr..

Rent Arrears – Options for Landlords15-Oct-2013

In these times of economic uncertainty a real concern for Landlords is their options if it looks..

Bankruptcy Tourism explained09-Oct-2013

Recent reports have highlighted a growing number of EU nationals moving to the UK to utilise the..

Kuits advises on £3.9m shopping centre purchase08-Oct-2013

Manchester law firm Kuits Solicitors has advised Delta Properties on the £3.9 million purc..

Construction Law Update01-Oct-2013

Site Waste Management Plans Regulations to be Repealed On 1st October 2013, DEFRA are to..

Employment Law Updates - Lord Sugar and 'Psycho Patient' Costumes27-Sep-2013

Lord Sugar’s Application for Costs is Refused by Tribunal Lord Alan Sugar has failed in hi..

Testimonials

The results are always exemplary. Kuits performance has clearly added value to our business.

Clive Ashcroft, head of Legal Services, Land Securities PLC

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Redeemable Preference Shares

10-May-2013

Manchester Solicitors

It is not uncommon for private family companies and other privately held businesses to have significant loans due to their directors. They are a method of investing in a company but allowing for tax efficient extraction of profits at a later date and often date from the incorporation of the business.

Directors loan accounts allow for tax efficient extraction of profits from a business for higher rate tax payers rather than them paying a salary, bonus or dividend. Profits can be distributed as a part repayment of the directors loan and will suffer no tax in the directors hands. The effect of this is that whilst the company will have paid Corporation Tax on profits this is normally much less than the income tax the director would have paid themselves.

However, upon the death of a director the loan account may be subject to Inheritance Tax potentially at 40%. The payment of this tax needs to be found from somewhere and often requires a part repayment of the loan to fund it and this could put the company under financial pressure.

It is however possible to structure director's loan accounts as redeemable preference shares rather than a loan. The effect of this is that the shares can still be redeemed in the same way as loans in a tax efficient manner but once the shares have been held for 2 years they should qualify for relief from Inheritance Tax. In addition, no tax would be payable on the death of the holder.

Redeemable preference shares typically have a fixed value regardless of the performance of the company. However, the main downside when compared to a directors loan account is that if the business became insolvent the shares would rank below a loan on winding up and thus putting capital at greater risk.

However, as part if long term Inheritances Tax planning redeemable preference shares can play a great role in tax mitigation.

For more information on Redeemable Preference Shares or other Inheritance Tax planning contact Paul Bricknell


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