oops, not finished!!

If we have a situation where one is sitting on a corporate with pots of cash, and you're debating whether to do a wind up or not, at the moment if you wound that company up then you are looking at a 20% tax bill on the extraction, assuming that the 10% Entrepreneurs' rate has been used or is not available. Now that is far far cheaper than what might be around the corner.

So instead of winding up, leave the money in the company A, Sandman, then form another company B which will be a property company. Company A will then lend money to company B, to buy property. The beauty of that is the ex trading company is lending which qualities 100% for Business Property Relief, so the shares in the loan company will not be in your estate, so exempt for Inheritance Tax!!

In the property company the shares are in your estate, but the company isn't worth anything because the loans are equal to the property values. If property values do go up, you can use growth shares in the property company, so that any growth goes to the B shares which are owned by your children, Sandman, then you've got a pretty efficient vehicle through to retirement.

The property company will then pay interest on the loan to the lending company which can be paid to the shareholder as dividends, for which the first £2,000 is taxed at 0% Sandman!!!

All in all, good tax planning.