Yes, I opened a ltd co investment account a few years ago due to similar reasons, particularly losing to inflation and ever increasing personal tax / loss of reliefs. My accountant was not keen but couldn't provide any reasonable alternative.
After messing around with trading, I invested exclusively in low fee global index trackers and left it to churn. As far as I am aware, corp tax applies on disposals, losses are deductible and dividends received are generally not taxed, to avoid double taxation. I think CIC is only a factor if your trading profits become a very significant proportion of your ltd co turnover.
The downsides - to investing or holding large reserves in general - are:
- Effective lock-in period, i.e. long term bear market. Suppose a quick 50% drop and a recovery taking 10+ years.
- A raid on your funds via IR35 retro-action or perhaps a new tax on retained reserves (recently touted)
- Hitting higher rates of personal tax on eventual liquidation
It has worked for me so far due to market conditions and a gradual draw-down strategy. However, it is worth an exhaustive look at legal personal tax breaks, while they still exist. As always, DYOR.
After messing around with trading, I invested exclusively in low fee global index trackers and left it to churn. As far as I am aware, corp tax applies on disposals, losses are deductible and dividends received are generally not taxed, to avoid double taxation. I think CIC is only a factor if your trading profits become a very significant proportion of your ltd co turnover.
The downsides - to investing or holding large reserves in general - are:
- Effective lock-in period, i.e. long term bear market. Suppose a quick 50% drop and a recovery taking 10+ years.
- A raid on your funds via IR35 retro-action or perhaps a new tax on retained reserves (recently touted)
- Hitting higher rates of personal tax on eventual liquidation
It has worked for me so far due to market conditions and a gradual draw-down strategy. However, it is worth an exhaustive look at legal personal tax breaks, while they still exist. As always, DYOR.
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