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Planning for business owners

Planning ideas to help clients who own a business become more tax-efficient.

Helping business owners with their tax planning

Clients who own a business have more complicated financial arrangements than most individual investors. So for many business owners, becoming more tax-efficient can be a priority.

With Venture Capital Trusts (VCTs), Enterprise Investment Scheme (EIS) investments, and investments that qualify for Business Relief (BR), investors can claim certain tax reliefs which act as an incentive to take on the risk of investing in smaller companies. Read more about the risks.

Let’s look more closely at planning ideas for business owners.

Planning ideas for clients

Wants to extract money from company


It’s common for business owners to find cash builds up in their business. But extracting that surplus money could create a significant tax liability.


Clients who own a business and want to make personal investments can take a dividend from their company and offset some or all of the income tax that arises by making a tax-efficient investment.


Venture Capital Trusts (VCTs)
Enterprise Investment Scheme (EIS)

Recently sold a business


Clients who are planning to sell or have sold their business could find that the proceeds become liable for inheritance tax. While a client could typically pass a family business to loved ones free from inheritance tax when they die, proceeds won’t qualify for relief.


Clients who’ve sold their business in the last three years could benefit from immediate relief from inheritance tax when they reinvest some or all the proceeds in a qualifying investment.


BR-qualifying investments

Enterprise Investment Scheme (EIS)

Wants to retain qualifying status


Companies holding a significant amount of cash could find their shares will no longer qualify for relief from inheritance tax. But removing cash from a business can create lifetime tax implications.


A company could keep surplus cash within the business and use it to undertake trading activity that qualifies for relief from inheritance tax.


Speak to your local contact to find out more.

Risks to keep in mind

Capital is at risk

The value of an investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest.

Tax relief can’t be guaranteed

Tax treatment depends on individual circumstances and tax rules could change in the future. Tax reliefs depend on the VCT and portfolio companies maintaining their qualifying status.

The investment may be volatile and difficult to sell

VCT shares and the shares of AIM-listed and unquoted companies could fall or rise in value more than other shares listed on the London Stock Exchange’s main market. They may also be harder to sell.

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Key documents

Octopus Titan VCT brochureDownload
Octopus AIM VCTs brochureDownload
Octopus Apollo VCT brochureDownload
Octopus Ventures EIS Service brochureDownload
Octopus Inheritance Tax Service brochureDownload

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