Business Advice Berkshire

Business Advice Berkshire – Can a Business have too Much Cash !

For most business owners cash is king, it is the lubricant for the engine of business.

Having lots of cash is the aim of a business, however, having too much cash can be problematical.

The cash in the business is clearly an asset but if there is no earmarked use of the cash, then this may impact :-

business property relief for inheritance tax,

entrepreneurs’ relief for capital gains tax.

So, although the cash accumulated may give you a feel good feeling now, it may not if it is regarded as an excepted asset.

Cash reserves

Some businesses like to retain a high level of cash in case there is an economic downturn or uncertainty (like now).

Unless there is evidence showing the cash is being held for a specific identifiable future purpose, it is likely to be treated as an excepted asset.

Like any major factor with running a business, it is best to evidence your reasons in your Director Board Minutes.

Worth a discussion?

Solutions to this are available, to find out more, knock on our door!

Ray Best is a resilient Financial Planner with a unique approach to investment planning, his work ethic has propelled him from humble beginnings to be voted as a top UK Financial Planner by Vouched For (as published in the Sunday Times). These days he works with families with large investment portfolios or big inheritance tax liabilities, the first step, is to book a Discovery Meeting HERE.

More Posts