Top tips for tax effective diversification strategy for your business

Whether branching out through the introduction of a complementary product, entry into a new market or an acquisition, this new challenge gives the company and its owners, the opportunity to take stock of their current operating and legal structure and consider whether this meets their requirements both now and in the future.

Any corporate restructure or reorganisation can give rise to a range of tax issues which will require careful consideration and planning and should be considered alongside both the company and individual owners' short-, medium- and longer-term goals. In the case of a family-owned business, typically they will have to consider both the need to effectively manage the business (growing turnover, maximising profits, retaining and motivating key staff and raising capital) as well as the longer-term family strategy for retaining and protecting wealth.

While involving some upfront cost, a reorganisation to achieve the right operating structure can often lead to significant savings and create opportunities for a business to grow and innovate in the medium to longer term as well as provide the opportunity to implement the most appropriate overall ownership structure to manage the interaction between family and management.