'Investing' £100k into my business for a year?
Discussion
Hi,
I am selling my house currently and once fees etc are paid, I will have between £100k-£115k.
I am thinking of renting for a year (business has only been trading for a year) so that when I come to get another mortgage next year, I will be in a better position.
What I am trying to work out is if I were to invest that money into my business so that in a years time I have quite a bit more, how does it work with the tax/liability side of things??
I don't want to turn my £100k into £150k and then have a heap of tax to pay although obviously I realise I will have to pay more corporation tax as the business will be making more profit.
Basically what I am getting at is what is the best way to invest my money for a year into my business!!
Thanks
I am selling my house currently and once fees etc are paid, I will have between £100k-£115k.
I am thinking of renting for a year (business has only been trading for a year) so that when I come to get another mortgage next year, I will be in a better position.
What I am trying to work out is if I were to invest that money into my business so that in a years time I have quite a bit more, how does it work with the tax/liability side of things??
I don't want to turn my £100k into £150k and then have a heap of tax to pay although obviously I realise I will have to pay more corporation tax as the business will be making more profit.
Basically what I am getting at is what is the best way to invest my money for a year into my business!!
Thanks
You make reference to corp tax so I assume you have a limited company. I'm assuming you are a director of the limited company.
Your £100k injection will be into your directors loan account, meaning you can take the same 100k back out the business at any stage without paying additional tax.
Simples.
Your £100k injection will be into your directors loan account, meaning you can take the same 100k back out the business at any stage without paying additional tax.
Simples.
Any reason why you would want to invest the full 100k into the business? Does the business need it straight away? Interest rates might be low, but they are typically lower for business accounts and then the company will have to pay tax on the interest too.
Drip feed your cash into the company as and when it needs it, with the rest sitting in an interest account so you are earning some interest.
Drip feed your cash into the company as and when it needs it, with the rest sitting in an interest account so you are earning some interest.
Sorry, didn't exactly make everything clear...
Yes I'm a director of the LTD company.
The business is buying and selling cars so my reason for investing all of it is to buy more stock.
What i'm trying to get at is I want to invest the £100k for a year so that when I need to take it out, that £100k has turned into £150k (example). I just want to see if there is any way to do it or is it as simple as it will be seen as a dividend??
If that is the case, what would my best option be to get a good return? (little bit of risk)
Yes I'm a director of the LTD company.
The business is buying and selling cars so my reason for investing all of it is to buy more stock.
What i'm trying to get at is I want to invest the £100k for a year so that when I need to take it out, that £100k has turned into £150k (example). I just want to see if there is any way to do it or is it as simple as it will be seen as a dividend??
If that is the case, what would my best option be to get a good return? (little bit of risk)
The £100,000 hasn't turned into £150,000. It's a £100,000 loan
If it turns into £150.000 it would mean the business would have made another £50,000 net profit.
Against which the company would claim the usual tax deductions.
Any dividend or salary you then paid yourself would be subject to personal income tax.
If it turns into £150.000 it would mean the business would have made another £50,000 net profit.
Against which the company would claim the usual tax deductions.
Any dividend or salary you then paid yourself would be subject to personal income tax.
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