How we saved an Isle of Dogs fund manager £26,500 through bonus and carry planning
Client B is an Isle of Dogs resident working for a Canary Wharf investment firm, with salary, a large bonus and a carried interest entitlement. Total income reached well into the additional-rate band, and the carried interest treatment hadn't been properly considered — the previous accountant had simply reported everything as income without analysing the position.
We reviewed the full picture. We analysed the carried interest against the conditions for capital treatment versus the Income-Based Carried Interest rules (which depend on average asset holding periods), ensuring the correct and most favourable treatment under the current Finance Act. We made a substantial pension contribution to recover part of the tapered personal allowance, and structured the bonus and Gift Aid efficiently.