An established and successful Hotel operated as a partnership between two generations of a family. The family were incurring significant levels of personal tax and wished to minimise these. At the same time, they were looking at planning forward for the succession of the business.

Red Dot recommended the transfer of the business from a Partnership to a Limited Company. The client’s previous accountant advised the client that this was not possible, so our client was understandably sceptical that we could do this.

We could understand why the previous accountant had taken the stance that they did, because this was a very complex process due to the valuations of the assets and ages of the Partners. During our work, Red Dot had to consider the implications on Income Tax, Corporation Tax, Capital Gains Tax, Value Added Tax, and Stamp Duty Land Tax, as well as Company Law requirements.

The end result was that we were able to incorporate the business, with the right structure for allowing future succession plans to be achieved, and obtain significant reductions in the tax liabilities – savings which the client immediately used to renovate many of the rooms in the Hotel.

We have experience of incorporating many businesses but this was the most complex and challenging we have undertaken. Our work was completed with the support of specialist tax and legal expertise from our network of trusted professionals, and our persistence and desire to help our client.