Client Story
How we saved an Amersham business owner £14,400 on profit extraction and pensions
Client B owns a successful Amersham-based consultancy through a Ltd company, with substantial retained profits and a high income. He'd been drawing high dividends with no broader strategy, no pension provision, and no thought given to extracting the retained reserves efficiently or to inheritance tax.
We built a combined strategy. We set up substantial employer pension contributions (tax-deductible for the company, using carry-forward of unused allowance, and sitting outside the estate for IHT), restructured the salary/dividend mix efficiently, reviewed Business Property Relief on the trading company shares, and modelled a future Members' Voluntary Liquidation to extract the reserves at the 10% capital rate on eventual retirement.
Total outcome: an estimated £14,400 annual saving versus continuing to draw high dividends, through pension contributions with carry-forward and an efficient remuneration mix, plus a forward plan for extracting reserves at the 10% capital rate and an IHT strategy using Business Property Relief.