AIA - Final Nail In The Corporate Partner Coffin
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24 June 2014
community embraced “corporate partners” with enthusiasm. The fiscal
of the corporate partner was providing immediate reduction in 31
January and 31
July income tax payments for the individual partners.
December 2013 legislation on mixed member partnership where excessive
will be taxed as income is obviously quite a disadvantage to the
partner” structure. Many argue that the return on capital is the answer
excessive profits problem. Obviously with the Annual Investment
increasing to £500k until 31 December 2015 this is a real disadvantage
partnerships which include a corporate partner as such partnerships
claims AIAs in accordance with CAA 2001 38A ss3(b). A case which has
this point is Horadwheel v HMRC.
fashion in farming structures is an independent limited company. Indeed
were many who were promoting this structure whilst the fashion for
partners was running away with itself. The separate limited company has
advantage of isolating some area of the farming activity without
in the land and in so doing having the problems of disallowed
Property Relief for minority shareholdings etc. Some elements of the
activity do lend themselves very well and there has been a recent rush
incorporation of the dairy elements of a farming operation.
of the dairy operation has the advantage of achieving the tax free
the realisation of the herd at market value and also making sure that
on the milk quota is realised on sale. Many are claiming this loss on
quota via the CGT negligible value claim as milk quota does cease on 31
There is a
very narrow window in which to enjoy the full AIA and much planning
made for 2014/15 and 2015/16. Obviously there must be caution around
rata of AIA where there are non-fiscal year ends and indeed even for
years the AIA of £500,000 is obviously reduced in the tax year 2015/16.
is no doubt that tax advantage can be taken of this.
About the Author
Supplied by Julie Butler F.C.A.
Butler & Co, Bennett House, The
Dean, Alresford, Hampshire, SO24 9BH.
Tel: 01962 735544. Email;
F.C.A. is the author of Tax Planning for Farm and Land
Professional), Equine Tax Planning
ISBN: 0406966540, and Stanley: Taxation
of Farmers and Landowners (LexisNexis).
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Article Published/Sorted/Amended on Scopulus 2014-07-30 11:00:21 in Tax Articles