Upsides of Social Media MarketingAs an entrepreneur, you’ve put in the hard work getting your business off the ground. Now that it’s showing a profit, it’s time to think about dividends, and getting a return on your investment. But where to start, and what about tax implications?
Holding period optimisation can play a role in a broader tax planning context. For instance, by holding shares for longer periods, you could benefit from other tax advantages, such as reduced capital gains tax when selling shares.Another strategy is to invest through tax-efficient vehicles such as retirement accounts or trusts. Here’s how these can help:
Trusts: Trusts can be used as a tax planning tool to manage and distribute your income in a more tax-efficient manner. By setting up a trust, it’s possible to structure income flows to beneficiaries in a way that reduces overall tax liability.Aligning with Personal Tax Situation: For instance, if you think that you might be in a lower tax bracket in a specific year, it might be a good idea to line up your dividend distributions accordingly.