X can also invest in government securities by evaluating the risk of investment. If X plans to take more risk to earn higher reward, X can invest in shares. X also has the option to give the surplus fund to X’s four children. In this case X has to evaluate tax implications on the basis of inheritance tax. In the given situation, X wants to find out the tax implications of each of these alternatives and then choose the best option to invest. Tax Implications for Set up of Business as Sole Trader It is the simplest of all business structures. Setting up a business as a sole trader can be very scary because X‘s liability would be unlimited. But at the same time rewards are also unlimited as X will have claims to the extent of profit earned by business. Moreover, X does not have to register with the Companies House and this means that X won’t have to pay the corporate tax which X had to pay had he set up an incorporated company. Another advantage for a sole trading business is that if X is not maintaining a payroll, paper works for the employees then red tapes will be reduced greatly. But this business structure exposes X to greater risk for which X may need to cover up with insurance policy. Thus as a sole trader, X can keep all profit after paying taxes on them according to tax slab.