Point

SPRING 2010

more than just numbers.

You could be sitting on

a capital goldmine
By Barry Laurie
IMAGINE your business starts to
receive substantial payments
from HMRC rather than the other Barry Laurie:
way round. It may sound like check out ‘integral
every business owner’s fantasy, features’ in hotels
but through making full use of such as a water
the tax system’s rules on capital heating system
allowances it is possible not only
to reduce the amount of tax you
This is because the capital
pay after undertaking investment
allowance rate for plant and
projects but to get retrospective
machinery is 20 per cent.
payments from the taxman.
By skilfully presenting a case
The capital allowances sys-
to the Revenue which incorpo-
tem, one of the few really big tax
rates a full understanding of the
breaks available to businesses,
capital allowances rules – it is
has undergone a shake-up in
emphatically not a box-ticking
recent years, and there is scope
exercise – it is possible to max-
through insightful consideration
imise the sums you can claw
of the regulations to optimise the
back from HMRC.
tax breaks your business might
F rench Duncan has a long
enjoy.
track record of success in assist-
There is no rule of thumb on
ing businesses, large and small,
what the allowances are worth
as 40 per cent of the capital o n ‘ i n t e g r a l f e a t u re s ’ w h i c h to make the most of the capital
since it depends on the tax rate
expenditure. That applies also to include items in a hotel, shop or allowances system.
of the business, and there are

‘
transactions that may have commercial property develop- Our role is to guide our clients
also so many different types of
taken place some years ago. ment such as a water heating and to help them present the
allowance. But in the best case,
U s i n g F r e n c h D u n c a n ’s system. best possible case of maximised
the tax saving could be as much
proven skills to reconsider past Now, whereas the rate of cap- capital allowances whenever
transactions it may be possible ital allowances here is usually 10 they have undertaken or are
to create opportunities for per cent, by including the boiler about to undertake a major cap-
In the best greater capital
allowance tax relief.
of the water heating system as
an item of plant and machinery
ital investment project.
To discuss capital allowances
case, the tax T h e re are many
possibilities –
rather than as an integral fea-
ture, there can be an overall
opportunities further, feel free
to contact me on 0131 243 0172
saving could be as take for exam-
ple the rules
uplift in the total value of the
capital allowances available.
or Ann Somerville on 0141 271
2806.
much as 40 per cent
 With the Internet an indispensable tool of global business communication, French Duncan is
launching a Twitter facility http://twitter/French_Duncan to keep clients and the business com-
munity generally up to speed with developments impacting on how they run their businesses.
Barry Laurie, above right, Already a participant in the Linked-In network, http://www.linkedin.com/companies/470116
Tax Partner, French Duncan LLP French Duncan’s Twitter facility will give followers up-to-the minute news on business and tax
issues and guide users to the firm’s website where a fuller briefing is provided.
 SPRING 2010 Page 2 .

TRUSTS: the top tips to act on

By Gillian Wrigley
MANY family businesses use trusts to protect family assets,
particularly on behalf of children and vulnerable adults. A num-
ber of trusts, however, are inadequately drawn up and adminis-
tered and, as a result, can cause a great deal of unnecessary
heartache and expense. Here are seven helpful tips...
A trust deed should be drawn
1 up by a solicitor and should
state very clearly what has
been set up and why.
Many trusts are first set up in
wills but are never reviewed.
As a result, cash might be
given to people who were
not intended to benefit.
2 It is very important the
tax authorities are
informed of the formation
and existence of any trust. The
trust is then on a proper tax
cycle.
There can be big problems
when, for example, a benefici-
ary dies and HMRC does not
know about it.
Gillian Wrigley,
Tax Partner, French Duncan LLP 3 The trustees should have
a relationship with
Tel: 0141 221 2984 someone whose role is to
 Trust me...
it’s never too
early to
put your
affairs in order
consider the tax position of the
beneficiary of the trust.
Otherwise, someone entitled to
a benefit may be required to
pay tax even though they have
not actually benefited. In
certain circumstances,
trustees, too, may find them-
selves facing a tax liability.
Trusts pay the same rates of
4 IT and CGT as would an
individual.
There are, however, IHT
benefits to be derived from
trusts whether or not
the beneficiaries are in
the UK.
Trustees should
5 meet at least once a
year – and minute
their meeting.
Ignoring changes in
circumstances over the
years can cause big
financial problems as
well as family heart-
ache. The costs of
sorting it all out can be
substantial.
The trust deed should be
6 reviewed regularly as
circumstances change.
It is relatively easy to add or
remove beneficiaries. Older
trusts can be more difficult.
A trust should always be
7 wound up if there is no
longer a need for it.
At least 10 per cent of the
trusts I have to deal with have
served their purpose and are
effectively redundant.

Don’t miss out on the new

ISA deadline
By Peter Haveron
WHEN the Chancellor
announced last April his
changes in the amount that
could be invested in an ISA, it
was only the second increase
in almost a decade.
But the rise, when it came,
was worth waiting for – the
level of contribution went up
from £7,200 to £10,200 in
October 2009, after allowing
providers six months to get
their houses in order for the
change.
Initially – that is from
October 6 last year – the
increase was available only
for those aged 50 and over,
but from April 6 this year the
increase applies to everyone.
It is an opportunity not to
be sniffed at: the changes
mean individuals will be able
to invest up to £3,000 more
into this tax-efficient vehicle,
subject to some basic
limitations.
You can invest up to the full
£10,200 in a stocks and
shares ISA. Alternatively, up
to £5,100 of the new ISA
allowance can be saved in a
cash ISA with one provider.
The remainder of your
allowance can be invested in
a stocks and shares ISA.
We are now nearing the
end of this year’s ISA season
and it would be a grave mis-
take not to take advantage of
the opportunity to shelter as
much of your money as pos-
sible in this totally tax-free
environment.
As a medium to long-term
investment, equity ISAs can
generate competitive growth,
and at a time when there is
market nervousness about
the possibility of an increase
in Capital Gains Tax, currently
at 18 per cent, any sum that
can be removed from the tax
environment will be of bene-
fit.
If an individual investor had
taken advantage of his full
PEP allowance – the forerun-
ner of ISAs – he or she would
have been able to shelter a
total of £82,000 from the
taxman from their inception in
1987 to their abolition in
1999.
Taking full advantage of
ISAs in the succeeding
period would have salted
away in excess of £70,000.
That’s a tax-free total of more
than £150,000 – excluding
investment gains and divi-
Peter Haveron,
Financial Services Manager,
French Duncan Financial Services Ltd
Independent Financial A d v i s e r s
– authorised and regulated by the
Financial Services A u t h o r i t y
dend re-investment over the
period. This figure doubles up
for married couples.
However, the deadline for
this year’s ISA applications is
approaching – April 5 – and
dispositions must be in hand
in advance of this date.
So, to avoid missing out on
the ISA opportunity, contact
me on 0141 221 2984.
Page 3 SPRING 2010
Deals are still being clinched
THE recession continues to
bite but a number of French
Duncan clients have been
able to expedite their invest-
ment plans with the help of
Regional Selective Assistance
(RSA) grants. In a recent case,
Euan Ferries and Graeme
Smith of French Duncan
helped a foreign investor
secure a grant of just under
£10 million towards a major
capital investment project.
As ever, RSA applications
need to be presented in a
skilled and knowledgeable
manner as part of an overall
investment funding package if
they are to be successful.
Their use in challenging times,
such as those businesses
face at present, is fundamen-
tal if the economy is to
prosper as the economic
climate improves.
Graeme Smith said: “We
have been assisting some
large international companies
looking to invest in the UK,
creating prosperity and jobs.
“At the same time, we are
finding a greater degree of
confidence amongst some of
Scotland’s indigenous busi-
nesses who want to take
advantage of current market
conditions by taking steps
now so that they will be in a
stronger competitive position
once the recession has come
By Robert Clark
AFTER 10 years of sometimes
controversial application,
research and development tax
relief has become part of the
UK’s innovation culture,
encouraging business growth
and creating high value jobs.
And in a sign that the relief
continues to evolve, a restric-
tion which had impacted on
SMEs was lifted in the Pre-
Budget Report at the end of
last year, opening up further
opportunities for qualifying
firms to claim.
Until the 2009 PBR, SMEs
were denied the enhanced tax
relief for R&D expenditure
unless the claimant company
held the derived intellectual
property. This caveat has now
been removed for expenditure
incurred by an SME.
With the right guidance, this
has the potential to significant-
ly add to the 6000 UK compa-
nies who currently benefit from
.
to an end.”
Added Euan Ferries: “RSA
is an important part of the
package but there is also
other non-bank funding assis-
tance available from bodies
such as the West of Scotland
Loan Fund, UK Steel and DSL
Business Finance. By using
these sources alongside the
tax benefits from capital
allowances and research and
development expenditure,
clients are out there making
things happen.
“One example is in relation
to projects which involve the
acquisition of property where
there are currently a number
of bargains available at lower
prices which, alongside the
RSA grant and other funding,
can make expansion plans
Opportunity knocks on
SME tax relief
claiming the credit at a total
value of more than £600m a
year. According to a CBI
survey, 80 per cent of
companies said the tax credit
tangibly benefited their overall
R&D activity and more than a
third increased their R&D
spending as a direct result.
Fifty per cent said the credit
directly helped maintain their
UK R&D spend, and 76 per
cent reported indirect benefits.
From August, 2008, 175
per cent of eligible R&D
Bargains:
investing in
property can
be beneficial
at present
possible, which might in the
recent past have seemed
over-ambitious.”
French Duncan considers
itself to be the leading adviser
in Scotland on RSA applica-
tions, having been involved in
raising more than £60m in
RSA over the last five years,
and our corporate finance
team is always available to
talk to clients about ways in
which various sources of
funds can be assembled to
secure long-term investment
projects.
 To discuss RSA grant
opportunities further, call
Euan Ferries or Graeme Smith
on 0141 221 2984. Or email:
e.ferries@frenchduncan.co.uk
g.smith@frenchduncan.co.uk
expenditure is allowed as a
deduction against the
company’s taxable profits.
That means for each £100
spent of qualifying costs your
company or organisation could
have the income on which
Corporation Tax is paid
reduced by an additional £75.
Companies must have a
minimum spend of £10,000 in
any year on qualifying R&D
expenditure and there is an
upper limit of €7.5m on the
total amount of aid you can
Smart way
forward
FRANCHISING is an increas-
ingly important business
sector for entrepreneurs,
offering excellent opportuni-
ties and defying current
economic vagaries.
Eight out of 10 start-ups
fail in their first year, yet more
than 90 per cent of top
franchises survive and thrive
over the same period.
The reasons are not hard
to find: franchises provide
access to an established
brand and concept; the
autonomy of self-employ-
ment; and ongoing logistical
help as well as business
support and guidance.
As our case studies on the
Back Page show, franchising
creates opportunities for
commercial success when
backed by the right brand
and the right tools plus
support.
French Duncan has a
proven track record in
supplying expertise, business
advice and professional
guidance to both franchisees
and franchisors.
Find out how French
Duncan’s franchising unit can
help you: call Kevin Booth on
0141 221 2984 or email:
k.booth@frenchduncan.co.uk
 ON THE UP & UP
– Back Page
receive on any one project.
These reliefs are not straight-
forward: professional advice
should be sought if you believe
your company is eligible.
At French Duncan, we have
much experience of submitting
many such claims for clients,
achieving significant tax
benefits for them in the
process.
If your company is involved
in research and development
work involving development of
innovative new products, we
would thoroughly recommend
consideration be given to
looking at the eligibility for R&D
relief – considerable tax bene-
fits can be obtained as a result.
Robert Clark,
Partner, French Duncan LLP
 P int
SPRING 2010

Len, top, and Kevin
Len, Kevin
on the move
LONG-SERVING French
Duncan partner Len
McGuire is stepping
down as a partner in
French Duncan on 30
April and will enter into a
two-year consultancy
agreement with the firm.
He follows in the
footsteps of Kirkintilloch
On the up and up
MARTIN Brown is on the brink of Martin said: “The potential for crucial start-up period.
something really big – and he has expansion with Howard’s Storage “French Duncan were invalu-
all his plans for the future neatly World is enormous.” He turned to able with early-stage support.
packaged. French Duncan, he said, not just They gave me excellent help with
The go-ahead French Duncan for professional services, but for the business plan and how to
client has been awarded the UK its unique brand of advice, structure the business.”
master franchise for Howard’s guidance and support in the www.howardsstorageworld.co.uk
Storage World, an international
retail franchise operation provid-
ing all forms of storage and Glasgow
organisational products for the
55.86°N, 4.26°W
home and office.
He is now rolling out the 375 West George Street
concept across Britain, providing
G2 4LW
solutions in a world where living
space is at a premium. Tel: 0141 221 2984
Scots entrepreneur Martin won
the master franchise last May
from the Australian-based
organisation, which operates
Edinburgh
55.95°N, 3.22°W
across the globe.
He opened his first store in 56 Palmerston Place
Livingston last October and is on
target to launch his second in
EH12 5AY
On the crest
Aberdeen in April. In an adjunct of a wave: Tel: 0131 225 6366
to the High Street presence, Martin, above,
Martin recently launched his all- and Gordon
important online operation, allow- Falkirk
ing customers access to the vast
range of products while they wait
56.00°N, 3.78°W
for a branch to open in their area. 39 Vicar Street

Driving to
based French Duncan FK1 1LL
partner Kevin O’Sullivan
who exited last year and Tel: 01324 634111
is also now serving a
period as a consultant.
Managing Partner
success Kirkintilloch
GORDON Gibson is busy teeing up a
Robert Kerr said: “Their 55.93°N, 4.15°W
master franchise which could see
collective knowledge and
him climb the Scottish business
insight into clients’ affairs cleaning system can restore a full 74 Townhead
and wider business leader board. set of clubs to pristine condition in G66 1NZ
matters is immense. WeThe entrepreneur – who has been just five minutes. Ultrasonic cleaning
helped along the way by French
will miss it greatly once of the club heads improves both Tel: 0141 777 6226
Duncan – has landed the Scottish
Len and Kevin conclude grip and ball control.
rights for Sonic Golf, an international
their consultancy roles The golf portable mobile simulator,
within the firm. franchise which offers tailored pack- which allows golfers to play some of Dumbarton
ages to golf clubs and golf event
“Meantime, clients and the world’s most exclusive and pres- 55.94°N, 4.56°W
organisers, including ultrasonic golf
staff will continue to tigious courses, has attracted con-

‘
club cleaning, golf simulators and
benefit from their wisdom siderable interest. 85 Glasgow Road
and experience.” electric buggies. Gordon hopes to have Sonic Golf G82 1RE
Gordon is also offering franchise products installed in between 40 and
and business licensing opportuni- 50 golf clubs in Scotland, including a Tel: 01389 765238
ties to individuals looking to few reputable household name
invest in the lucrative courses, within the coming year.
Scottish golf business. He said: “I was fortunate to have Hamilton
He said: “We have French Duncan as my advisers. As 55.77°N, 4.03°W
The team at French set up a main office well as thoroughly professional
and demonstra- accounting advice, the franchising 104 Quarry Street
Duncan were invaluable tion suite, show- unit under Kevin Booth has been ML3 7AX
with early-stage support. They ing franchisees
and clients the
invaluable in working up the financial
modelling for the business.” Tel: 01698 459444
gave me excellent help potential of Call Gordon on +44 7545 697 808
the product.” or email:
The Sonic gordon@sonicgolfscotland.co.uk www.frenchduncan.co.uk

Martin Brown,
Scots franchise entrepreneur
more than just numbers.