This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

Keep it in the family? Spreading business income

Shared from Tax Insider: Keep it in the family? Spreading business income
By Alan Pink, June 2022

Alan Pink looks at ways of reducing income tax on business income by spreading it amongst the family and others. 

It is a common problem that the UK taxes families where there is only a   single earner more heavily than where there are multiple earners.   

A straightforward example of household income of £100,000 illustrates this. If there is a single earner, perhaps someone carrying on a business, who makes profits of £100,000, roughly half of this will bear income tax at 40%, whereas two earners making profits of £50,000 each will enjoy the basic rate of tax on all that income.   

For this reason, it is common for people in business to look at ways of spreading the income from a business amongst more than one person. There are various ways of doing this, straightforward or not so straightforward, depending on how the business is structured.   

This is one of our 2221 Premium articles

To see this article in full and unlock access to our complete library of 2221 articles click 'subscribe & unlock' below:

Subscriptions include a 14 day free trial
+ money back satisfaction guarantee

Begin your tax saving journey today

Each month our tax experts reveal FREE tax strategies to help minimise your taxes.

To get Tax Insider tips and updates delivered to your inbox every month simply enter your name and email address below:

Thank you
Thank you for signing up to hear from us!