Corporate Financial Services

How can we help?

Succession Planning

We can offer advice which will enable you to pass on your business with the minimum of tax payable. In particular, Capital Gains Tax and Inheritance Tax are two obstacles which can limit this.

Capital Gains Tax has changed in the last two years with the phasing out of Retirement Relief and the introduction of Taper Relief. Structuring your business in the right way is crucial and we can help you decide whether you should be trading as a sole trader, partnership or whether you should consider incorporating.

If you own the business with others, we can help you ensure that on their or your retirement or death, the business ends up in the right hands.

What is key person assurance?

Key person assurance protects you against the loss of key personnel through death or critical illness.

Surprisingly, a survey carried out by the NOP Research Group revealed that:

• 94% of the businesses they surveyed could identify at least one person who was vital to the business.
• 80% of the businesses they surveyed could identify at least two key personnel.
• Fewer than 33% of the companies surveyed had any form of key personnel assurance.

Ironically, most companies have their other assets insured against loss or damage, yet when it comes to their key assets, their personnel, they haven't even thought about it.

What makes a key person?

Do you employ anyone who:

• Plays a critical role in the company?
• Carries out a vital sales function?
• Plays a major role in a major project?
• Have vital business contacts?

If the answer to any of these questions is yes, then you should seriously consider protecting your business against the effects of losing such a person. Statistics reveal that there is a very real chance that one of your key personnel could suffer a serious illness before they reach retirement age.

REMEMBER: Under the Insolvency Act 1986, directors of a company have to take all reasonable steps to ensure that they protect against the demise of their company. If a company fails because of the death, or loss through serious illness, of a key employee, this can be viewed as a foreseeable event and as a director you can be held accountable for not taking reasonable precautions and putting in place the relevant protection.

What is Share Purchase Protection?

Have you considered what would happen to your share of the business or your partner's share of the business should either one of you die or suffer a serious illness? Would you be in a position to buy out your partner's shares from their family or would you expect their surviving spouse to take over where they left off?

By the same token, if you were to die, what would the business mean to your surviving spouse? Would he or she be willing or able to become involved? If not, what could they expect to survive on?

By putting in place a simple arrangement you can make sure that if either you or your partner were to die, or suffer a serious illness that would prevent you from returning to work, there would be enough money in place to buy out each other's shares.

This would mean that the business interests would be protected and that your family would have money in the event of your death. If you had to give up work due to suffering a critical illness you would have enough money from the sale of your part of the business to help you recuperate.

Employee Benefits

Your Business Relies On Its Employees

Many modern businesses depend more on their human assets for their commercial success than on their physical ones.

In today's dynamic labour market the skills, experience and intellectual expertise of your employees are at a premium. The challenges are first to recruit the 'right' people and then to retain and motivate them so that they resist your competitors' approaches.

High-value employees expect more than a competitive salary. By providing additional financial security to your firm's employees and their families these will add high perceived value at little additional payroll cost.

Income Protection and Critical Illness insurance can protect your staff against the debilitating effects of illness whilst life assurance can make a real difference to the financial well-being of their dependants.

Group Life Assurance

Without adequate life assurance in place an employee who dies may leave a legacy of outstanding debt and financial problems to the surviving family.

A Group Life assurance scheme can provide a lump sum benefit of up to four times salary free of Inheritance Tax if death occurs before their retirement.

In addition higher benefits may be available in the form of pension income for surviving dependants and Inland Revenue limits may be exceeded for very high earners.

The advantages to your business can be summarised as follows:

• Premium payments will be treated as a business expense and are fully deductible for tax purposes
• Funds will be in place for you to meet any moral obligation you feel you may have
• Levels of benefit can be varied for different types and grades of employee.

Group Income Protection

Should any of your employees be unable to work for several months, a year or even longer as a result of illness or accident you will probably have two objectives in mind:

• To continue to pay a worthwhile salary whilst the employee is absent
• To speed the recovery of the employee back into the workplace fit and healthy and once again contributing to turnover and profits.

An Income Protection scheme can achieve these for you.

Following a chosen waiting period a regular income will be paid until the employee is fit enough to return to work or reaches their normal retirement age.

The employee can also be assisted back into the workplace by continuing to receive partial benefit during periods of rehabilitation which may result in a return to work on a part-time basis or undertaking less demanding duties.

There are a number of business advantages to be gained by introducing this type of benefit:

• Premium payments will be treated as a business expense and are fully deductible for tax purposes
• Insurance cover can be tailored to match the contracts and grades of your employees
• Your staff remain within your employment during periods of incapacity
• Providing financial security in a period of vulnerability will foster and enhance the loyalty of your workforce
• Incentives and help are available to encourage your employees to return to work.

Group Critical Illness

The diagnosis of a critical illness such as heart attack, cancer or stroke in one of your employees is almost certain to invoke worries and concerns of both the financial and emotional kinds; hardly the environment to stimulate a rapid recovery and return to work.

Critical Illness insurance will pay a lump sum after diagnosis which will provide a range of options for the employee to consider, for example to repay a mortgage or debts, fund private treatment and convalescence or make essential alterations to their home.

Advantages for your business include:

• Premium payments will be treated as a business expense and are fully deductible for tax purposes
• Speedier recovery and return to work of employees who suffer a critical illness
• Specialist care and rehabilitation services available to help employees cope with the effects of serious illness
• Offering cover as an incentive to specific employees for achieving targets or promotion.

The above schemes can form an integral part of your contingency planning for business risks which can be fully protected by insurance.

Group Stakeholder Pensions

Stakeholder pensions were introduced on 6 April 2001 with the intention of encouraging the five million or so people without pension provision to save towards their own retirement.

As an employer if you have five or more employees, you have a legal obligation to provide access to a stakeholder pension to all your employees earning more than the National Insurance lower earnings limit, unless you offer access to a prescribed alternative pension scheme to all 'relevant employees'.

The employer's obligation to comply with this legislation may seem onerous, but setting up a Group Stakeholder Pension Plan does not need to be as time-consuming or complicated as you might imagine. Your St. James's Place Partner can assist you to arrange access to a stakeholder pension by:

• providing all the necessary information and forms to set up the scheme
• establishing smooth administration, it is possible to arrange a payment method that enables contributions to be deducted directly from payroll systems
• providing secure arrangements so that you can have easy access to the information that you need about your stakeholder plan.

Advantages for your Business

• By making a stakeholder pension available to your employees you will be meeting your legal obligations
• You will be assisting your employees to secure a regular income in retirement
• Your business is not obliged to contribute to a stakeholder pension scheme but if it chooses to do so any contributions will be fully allowable as a business expense for tax purposes
• A stakeholder pension can be arranged for your business without fuss or worry, allowing you to concentrate on running your business leaving the administration of the scheme to a dedicated team of professional administrators.

Retirement Planning

Most of us wish to reach a stage in our lives when we can change the way we live, spending more time doing those things that we perhaps cannot do today because of the "needs of the business".

Some people call this retirement, but this can conjure up a picture of old age and a reduction in activity. We see retirement as something different - a time when you are simply changing what you do, perhaps increasing your enthusiasm for whatever you want to do. A happy retirement means having sufficient resources to enable you to live your life as you want to, not as you have to.

Of course, we are experts in pension planning, whether it is for a one-man band or a large organisation looking for advice for its employees. But a happy retirement is not just about pension plans. It requires the business to be structured in the right way from the word go.

Investment of personal and company money

We can provide you with guidance and advice on the investment of personal and company money.

With a Budget taking place at least every year, keeping in touch with tax changes alone requires a full time professional whose job it is to update you and to appraise you of any opportunities that may be of value to you and those you care for.

Knowing what to do with your personal investments can also take up more time than you can afford to devote to that area.

Knowing whether to top up your pension scheme with full tax relief or whether take out an ISA instead may sound like a simple decision but is really quite complex.

You may well think you can deal with all of this on your own, but most business owners or key personnel simply do not have the time to keep in touch with everything that is going on. We can help you arrange your affairs so that they meet your and your family's needs.