Is it an idea to invest money that you leave sitting in your company into various shares/funds? Was thinking of investing money into gartmore funds directly from teh companys accounts, obviously the company would have to pay tax on any of the profits but if its sitting there it might as well be growing right?
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yes of course. Most companies do that. P&G even did it so much that they once lost their whole year's profits speculating on interest rate derivatives.
The only thing to watch out for is if you end up doing so much of it that your company becomes an investment company rather than a trading company, because a different tax regime applies. -
Cool, so for instance ive got a gartmore ISA which I use to invest my own personal money in and I have a share trading account with III for personal investments I take it I would just open a new account in the company name?
I guess I cant open an ISA in the company name it would have to be a standard share trading account right?Comment
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ISA - the I stands for Individual, so not for companies.Originally posted by ndoodyComment
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No it can't be an ISA !!
Why just Gartmore ?
Why not open up an account with an all-market funds supermarket like Fidelity and have a more interesting portfolio ?It's my opinion and I'm entitled to it. www.areyoupopular.mobiComment
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no, you can't do that. There are personal investment vehicles and corporate ones, and never the twain shall meet. Personal investment products have personal taxation built in.gartmore ISAComment
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Yah, well thats what I have my III account for, I can trade in directo stock or any of the funds infact I started investing in JPM natural resources fund through my III account so what I'll need to do then is open another III account int he company name which will recieve direct investments?Originally posted by oraclesmith
Sounds easy enough, I'm in
I thought as much with the ISA thing, but worth asking if I wasnt sure right.Comment
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You might want to think about the following:-
Any investments the company make will be out of retained profits. Thus they have already had CT paid on them.
The company doesn't get a CGT allowance. Profits from the investments will be subject to CT. Not sure about offset losses against trading income.
If you are not a higher rate taxpayer you could just extract profits up to the limit with no further tax to pay and then invest these is a tax sheltered wrapper. Equally if you have used up all your allowance you have the opportunity crystallise gains and at least minimse any CGT you might have to pay.
I'm not saying it is not appropriate for you - just that you probably need to consider more things.
A sipp might be more appropriate depending on your personal views of this sort of vehicle.Comment
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