Tax implications of incorporation

In this lesson

1. 0:00 Tax implications of incorporation
2. 0:34 Taxes affected by incorporation
3. 1:04 Income tax and loss relief options
4. 2:03 Capital allowances and stock transfers
5. 2:17 National Insurance and employment status
6. 2:32 Inheritance tax and business property relief
7. 3:11 Capital gains tax and incorporation relief
8. 4:02 Gift relief as alternative to incorporation
9. 4:46 Stamp duty and corporation tax implications
10. 5:42 VAT registration and transfer of going concern

About this lesson

corporation tax, and VAT. Understanding how each of these operates during incorporation is essential for the Taxation (TX) paper and real-world practice. You'll learn how to manage income tax loss relief options when ceasing your sole trade, including current year, prior year, and terminal loss relief claims, plus the conditions for carrying losses forward against company income. The lesson covers capital allowances treatment, where you can elect for succession relief to transfer assets at tax written down value and avoid balancing allowances or charges. For CGT, incorporation relief is automatic when you transfer all assets except cash purely for shares, though you can claim gift relief as an alternative if you prefer to retain certain assets or receive cash consideration. The lesson also addresses National Insurance implications—moving from Class 2 and 4 contributions to Class 1 employment contributions—and explains why inheritance tax is not triggered on incorporation itself, with business property relief available on shares you later gift or leave in your will. You'll understand stamp duty exemptions on share issuance, corporation tax treatment of goodwill and asset valuations, and the critical VAT position: the transfer qualifies as a transfer of a going concern if conditions are met, meaning it falls outside the scope of VAT, provided both entities are or become VAT registered.

Duration: 7m