A question many dentists ask themselves is ‘should I put my business through the process of incorporation?
In a nutshell, incorporation gives you the chance to benefit from the capital value of your dental practice now, as opposed to when you sell it or pass it on. It can boost your personal income and save you tax over a period of time.
It involves transferring your practice from sole trader or partnership ownership, into a limited company.
For a proportion of dentists, this transfer process provides a tax free lump sum which admirably replaces their existing personal income. It also means that as directors of a limited company, they benefit from paying corporation tax at a lower rate going forward than the income tax they would have paid as sole traders and partners.
Whether incorporation stacks up for you depends on a number of factors. The numbers do not stack up in the right way for every dentist and there are barriers to being able to incorporate. This is why, if you are interested in researching incorporation, it is vital you have an incorporation expert to look at your situation individually. We recommend you start by talking to your accountant.
Incorporation MAY be a significant opportunity for you but it’s crucial you put the process in experienced hands.
If you would like to discuss anything to do with Buying, Selling or Financing a dental practice then please Contact Us today.
