Extracting value from your assets for you to use elsewhere
Value can be extracted from assets as income or through realising the capital value of the asset.
Income is raised from allowing the use of the asset e.g. interest on savings, dividends on share investment, rent on the property, and is subject to the rules for income tax based on the annual income and related expenses.
The capital value of an asset is the underlying value, e.g. the price of a share or a property may increase significantly in the period it is held. This increase in value is not taxed as it accrues; it would be unfair to make a tax charge when no value has been received to pay that tax. Instead, gains arising on assets sold are subject to capital gains tax, which taxes the gain at the point it is realised, i.e. when the asset is sold.
The structure in which the asset is held and the way in which it is disposed of can greatly affect the application of income tax and capital gains tax to the value being received from the asset. Tax Innovations can assist in creating a holding or disposal structure that will minimise the tax payable and will be suited to your particular needs.