Buying Family Business.Tax ?

I have recently read that if you buy the family business after working there for 5 years or more your parents will receive the proceeds tax free.
If you were to finance this by personally borrowing the money and increasing your salary to repay the loan you end up paying tax at the higher rate on the increase.
Is there a more tax efficient way of doing this?

Thanks.

This is a highly technical area and if you are thinking of buying any business or if you are thinking of selling any business, you must take professional advice well in advance.

If you borrow in your own name to invest in a business, you will get full tax relief on the interest paid on the loan. So let's say that you borrow €100,000 at 6% interest. It will cost you €6,000 a year. You will be able to set this off against your income for tax purposes.

The relief is only on the interest element of the repayments and not the capital repayments.

If you have a home with a low mortgage, you should consider remortgaging to buy the business. This is the cheapest form of finance. It puts your home at risk if you can't pay the loan, but the low price of the finance makes it well worthwhile.

Brendan

See a tax advisor and/ or accountant. How the company is structured also matters. All quite complex.