Cash in ltd co and very low interest rates
Discussion
The company can invest in pretty much anything an individual can, you just have to be careful not to make more money from investing than trading. The only specific recommendation I would give is to find a well referred professional adviser to discuss it with - if you don't know one ask your accountant to refer you.
Far too many questions need answering (which you wouldn't do on a public forum) before anything like a sensible investment recommendation could be made.
Far too many questions need answering (which you wouldn't do on a public forum) before anything like a sensible investment recommendation could be made.
x5x3 said:
We have some cash in a ltd co bank account - the interest rate is pitiful.
Anyone have any ideas (preferably ones they have undertaken themselves) for investments
thanks in advance
I have set up another company. Trading company loans the other company funds (intercompany loan) so no further tax trigger (unlike drawing divis). Anyone have any ideas (preferably ones they have undertaken themselves) for investments
thanks in advance
Company 2 invests in residential property. Bought 2 properties so far, property one gross yield 12% property 2 gross yield 10%. After all expenses / voids etc i expect to see more like 8-9%. Will only pay 20% corp tax on rental income if left in company so fairly tax efficient.
Would recommend.
Alpinestars said:
Why?
I maybe out of date on this and I'm not an accountant so perhaps one will come along to correct or confirm but I believe the tax treatment is different, for example no Entrepreneur's relief and the scope for off-setting costs/losses is much narrower. Historically there was a higher rate of Corporation Tax payable as well - not so relevant here. Entrepreneurial Relief still exists for the disposal of assets in trading limited companies. If a company is mainly obtaining its income from investments, the disposal of its investment assets may not qualify for the relief.
http://www.att.org.uk/Resources/CIOT/ATT%20and%20C...
However, what constitutes "business assets", "trading" etc can be quite complex and counter intuitive at times.
Like most UK tax rules, what started out as a simple concept has turned out to be quite complicated.
http://www.att.org.uk/Resources/CIOT/ATT%20and%20C...
However, what constitutes "business assets", "trading" etc can be quite complex and counter intuitive at times.
Like most UK tax rules, what started out as a simple concept has turned out to be quite complicated.
trowelhead said:
I have set up another company. Trading company loans the other company funds (intercompany loan) so no further tax trigger (unlike drawing divis).
Company 2 invests in residential property. Bought 2 properties so far, property one gross yield 12% property 2 gross yield 10%. After all expenses / voids etc i expect to see more like 8-9%. Will only pay 20% corp tax on rental income if left in company so fairly tax efficient.
Would recommend.
thanks - that is an interesting idea, I assume you have a commercial mortgage through the ltd co or did you buy outright?Company 2 invests in residential property. Bought 2 properties so far, property one gross yield 12% property 2 gross yield 10%. After all expenses / voids etc i expect to see more like 8-9%. Will only pay 20% corp tax on rental income if left in company so fairly tax efficient.
Would recommend.
I was looking at this company as a more convinient way to invest in property - https://propertypartner.co
trowelhead said:
I have set up another company. Trading company loans the other company funds (intercompany loan) so no further tax trigger (unlike drawing divis).
Company 2 invests in residential property. Bought 2 properties so far, property one gross yield 12% property 2 gross yield 10%. After all expenses / voids etc i expect to see more like 8-9%. Will only pay 20% corp tax on rental income if left in company so fairly tax efficient.
Would recommend.
then look for other rental properties in portugal,florida etc;)Company 2 invests in residential property. Bought 2 properties so far, property one gross yield 12% property 2 gross yield 10%. After all expenses / voids etc i expect to see more like 8-9%. Will only pay 20% corp tax on rental income if left in company so fairly tax efficient.
Would recommend.
x5x3 said:
thanks - that is an interesting idea, I assume you have a commercial mortgage through the ltd co or did you buy outright?
I was looking at this company as a more convinient way to invest in property - https://propertypartner.co
Up to now they are owned outright (cheap flats). However i have spoken to a couple of brokers and it seems like it would be reasonable straightforward to raise mortgages via the company.I was looking at this company as a more convinient way to invest in property - https://propertypartner.co
This is also more tax efficient than buying BTL personally since the new tax changes came in, as interest payments are still allowable expenses.
Another idea is P2P lending, assetz capital, saving stream - all asset backed so you have some security. Should be looking at a 10-12% return for your increased risk.
I have no experience with the btl platform you posted however so can't comment there... I personally prefer the control of having the keys
I have no experience with the btl platform you posted however so can't comment there... I personally prefer the control of having the keys
pacoryan said:
Alpinestars said:
Why?
I maybe out of date on this and I'm not an accountant so perhaps one will come along to correct or confirm but I believe the tax treatment is different, for example no Entrepreneur's relief and the scope for off-setting costs/losses is much narrower. Historically there was a higher rate of Corporation Tax payable as well - not so relevant here. trowelhead said:
I have set up another company. Trading company loans the other company funds (intercompany loan) so no further tax trigger (unlike drawing divis).
Company 2 invests in residential property. Bought 2 properties so far, property one gross yield 12% property 2 gross yield 10%. After all expenses / voids etc i expect to see more like 8-9%. Will only pay 20% corp tax on rental income if left in company so fairly tax efficient.
Would recommend.
Wouldn't an inter company loan create an interest charge from company A to B? Or would company B treat the interest on the loan as an expense and therefore they would cancel each and other out? Company 2 invests in residential property. Bought 2 properties so far, property one gross yield 12% property 2 gross yield 10%. After all expenses / voids etc i expect to see more like 8-9%. Will only pay 20% corp tax on rental income if left in company so fairly tax efficient.
Would recommend.
msport123 said:
Wouldn't an inter company loan create an interest charge from company A to B? Or would company B treat the interest on the loan as an expense and therefore they would cancel each and other out?
- disclaimer - don't take this as tax advice *
But yes if you did the loan at a commercial rate of interest, it would cancel each other out anyway as it would be income on one side expense on the other.
If you wanted the cash back into company A, i suppose you could charge a very high % rate of interest, then use the rents to pay that interest thus moving cash back over time. That's not my intention however.
Gassing Station | Finance | Top of Page | What's New | My Stuff