Discussion
So DA, if I understand correctly:
- you have cash in your LtdCo that is surplus to your needs
- you have adequate pension provision, ISA etc and may have provided homes &/or pensions for your daughters
- you are faced with a huge tax bill if you withdraw the cash conventionally, and have no need for the net proceeds, or immediate purchases in mind
- your aspiration is long-term capital preservation with minimal tax impact
Firstly, as you know, you can open accounts in the name of the LtdCo to invest in virtually anything that you can invest in personally if you want to move the pre-tax cash into a specific asset class
Secondly, have you considered exposure to Lloyds as a NameCo? Reasonable returns, Uncorrellated to other more conventional asset classes, tax-transparency, and the potential to earn interest and/or dividends on the funds deposited, potentially providing two-returns from one chunk of money - the Lloyds leverage effect.
Not for widows and orphans obviously, but perhaps suited to your circumstances?
- you have cash in your LtdCo that is surplus to your needs
- you have adequate pension provision, ISA etc and may have provided homes &/or pensions for your daughters
- you are faced with a huge tax bill if you withdraw the cash conventionally, and have no need for the net proceeds, or immediate purchases in mind
- your aspiration is long-term capital preservation with minimal tax impact
Firstly, as you know, you can open accounts in the name of the LtdCo to invest in virtually anything that you can invest in personally if you want to move the pre-tax cash into a specific asset class
Secondly, have you considered exposure to Lloyds as a NameCo? Reasonable returns, Uncorrellated to other more conventional asset classes, tax-transparency, and the potential to earn interest and/or dividends on the funds deposited, potentially providing two-returns from one chunk of money - the Lloyds leverage effect.
Not for widows and orphans obviously, but perhaps suited to your circumstances?
My father was a Name, a lucky one in contrast to many of our family friends, some of whom killed themselves as a result of what was done. . It's not a party I would ever contemplate having lived through that mess and appreciating that there is almost nothing in place to prevent such a fiasco from re-occurring. 
DonkeyApple said:
My father was a Name, a lucky one in contrast to many of our family friends, some of whom killed themselves as a result of what was done. It's not a party I would ever contemplate having lived through that mess and appreciating that there is almost nothing in place to prevent such a fiasco from re-occurring.
Many layers of insurers carefully packaging up and parcelling out risk but sooner or later someone had to be the back-stop with assets declared and unlimited liability. Big profits year after year for taking that risk and everyone was getting fat. Easy money innit? [Or at least, "Excellent returns every year, old boy, from my wonderful little syndicate!"] What could possibly go wrong?
Ozzie Osmond said:
DonkeyApple said:
My father was a Name, a lucky one in contrast to many of our family friends, some of whom killed themselves as a result of what was done. It's not a party I would ever contemplate having lived through that mess and appreciating that there is almost nothing in place to prevent such a fiasco from re-occurring.
Many layers of insurers carefully packaging up and parcelling out risk but sooner or later someone had to be the back-stop with assets declared and unlimited liability. Big profits year after year for taking that risk and everyone was getting fat. Easy money innit? [Or at least, "Excellent returns every year, old boy, from my wonderful little syndicate!"] What could possibly go wrong?
The advent of the mini Name was the writing on the wall as to many that was a warning that they were needing to rope in more externals. But there came a point when even failing the £2m liquid assets requirement wouldn't get you kicked out as they knew they needed people to stay in.
By the 80s it was a fiasco that people weren't allowed to leave and was being peddled with the most outrageous lies. The greedy even put their wives in so when it turned they were finished.
But it was just the first of the modern City institutions to fall foul of greed and negligent regulation. There have been quite a few since.
DonkeyApple said:
The greedy even put their wives in so when it turned they were finished.
Reminds me of the classic Alex cartoon from the time:"You should have made HER the name, you old fool, then you could have divorced her or made her bankrupt or something ... this is MY inheritance we're talking about"
DonkeyApple said:
However, if it remains in the company it is IHT free under the current set up and I can just keep drawing a salary until I keel over rather than paying away 50% now and then losing another 40% when I snuff it.
I wouldn't be too sure of that now. HMRC view any "excess" cash in private companies as being cash belonging to the shareholders for IHT purposes and it will be taxed just the same.And they are the ones in charge of the definition of excess cash.....
Behemoth said:
Wasn't it litigation concerning asbestosis that collapsed the Lloyds house of cards rather than any repeated repackaging of risk? maybe I'm confusing different events..
There were lots of lawsuits. Some were frivolous and brought by people who'd just been greedy and underwritten more syndicates than they could cover while other suits were related to open frauds like Gooda Walker. Many syndicates were just writing as much business as possible at total disregard for risk and farming that risk out to externals. In many ways it was a predecessor to the mortgage fraud scandals of this century. cashmax said:
Why can't you make provision within the shareholding of the Ltd co for EP Relief?
Can you elaborate?At the end of the day, I'm happy keeping the funds in the Ltd but wondering what other options there are other than converting the cash into equities and just running that side as a long term investment portfolio.
DonkeyApple said:
cashmax said:
Why can't you make provision within the shareholding of the Ltd co for EP Relief?
Can you elaborate?At the end of the day, I'm happy keeping the funds in the Ltd but wondering what other options there are other than converting the cash into equities and just running that side as a long term investment portfolio.
If this is indeed the issue, can you not simply make whatever changes are required to the structure (if any) to take full advantage of ER relief to reduce the liability to 10%.
https://www.gov.uk/entrepreneurs-relief/eligibilit...
Ah, yes. It's not a quandary over how to remove the cash though. It's about what the safest way is to leave it there. For example, the thought was triggered by the current DB situation and how to be protected from a bank bail-in. My initial thought was to do what I know best which is to just convert the cash to an equity portfolio but most people in this forum probably have a far better understanding of Ltd companies than I do so I wanted to see if there were other obvious options that I was unaware of.
foxsasha said:
DonkeyApple said:
Can you elaborate?
+1?Ozzie Osmond said:
Just what is it that you want to do?
We wanna be free
We wanna be free to do what we wanna do
And we wanna get loaded
And we wanna have a good time
That's what we're gonna do
(No way, baby, let's go!)
We're gonna have a good time
We're gonna have a party!
hahaha, this is a very apt quote for kinda how I want my life to pan out!We wanna be free
We wanna be free to do what we wanna do
And we wanna get loaded
And we wanna have a good time
That's what we're gonna do
(No way, baby, let's go!)
We're gonna have a good time
We're gonna have a party!
Ozzie Osmond said:
foxsasha said:
DonkeyApple said:
Can you elaborate?
+1?The ER suggestion has been used by someone I know. I would strongly advise you consider it because the advice he was given as he had similar to your concerns but leaving the funds within the company was exposing it to risk - known and unknown.
Getting it out whilst ER was on the table (although slightly complex and did take some time and some additional costs) resulted in the funds being paid up and then distributed as required. The tax paid was recovered fairly quickly as it was a much smaller % than income tax etc.
HTH
Getting it out whilst ER was on the table (although slightly complex and did take some time and some additional costs) resulted in the funds being paid up and then distributed as required. The tax paid was recovered fairly quickly as it was a much smaller % than income tax etc.
HTH
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