There are plenty of anti-avoidance measures that prevent unincorporated businesses from altering the timing of profits. However, it may still be possible to change the timing of business expenses in to achieve cash flow advantages.
Where shareholders can control dividend payments from their own companies, consideration should be given to how surplus cash can be extracted, by bonus or dividends, and also to the timing of such dividends.
This valuable relief reduces the rate of capital gains tax (CGT) on a qualifying disposal of all or part of a business (eg by way of sale, gift or on some liquidations or similar).
Where an LLP or partnership has both individual and company partners (a mixed partnership) legislation has been introduced that seeks to tax the shareholders of the company partner on the income allocated to it – even if they have received no dividends from the company.