Declaring company assets/ tax return

[CupidAlaska]

Hi all,

I have just started running a limited company and I am the director and sole shareholder of this company- The nature of the business is forex day trading.
Last month, I lent the company £10k to be able to start trading and will take back out £10k before year's end so that there's nothing in the director's loan account.

Those 10k are now with my broker and I have started trading with it. I have no intention of taking any money back out at the moment.
So let's say I turn these 10k into 100k, but they still still in my trading account with my broker and I haven't actually transferred any money into the companies bank account, does this still count as profit I need to declare? I could potentially re-invest those 100k and lose them all?

Many thanks,

Cupid

[stek]

So let's say I turn these 10k into 100k....

[JRCT]

Surely, if you lent the £10k to the company, you would have transferred it into the company bank account and then transferred it from there, to the broker.

The £100k would then be paid by the broker to the company bank account and your company transfer £10k back to you.

At the moment, it sounds like you've set up a company with a balance of £0 and given £10k of your money to some bloke.

[northernladuk]

What is your LTD registered as? A trading company or an IT consultancy? Trading through the wrongly declared company is going to be a problem.

Best to engage and accountant and spend some time speaking to them....

And, erm, make sure you pay them up front just in case

[Kenny@MyAccountantFriend]

If the company is only doing trading would it not have been more tax efficient to have don’t this personally due to the capital gains allowances

Either way tax is only payable when profit is realised, i.e. every time a sale is made a profit or loss is realised and tax is payable on any profits.

Based on most people’s outcomes with day trading you will be lucky to repay yourself the 10k loan, hopefully you will prove me wrong.

[CupidAlaska]

If the company is only doing trading would it not have been more tax efficient to have don’t this personally due to the capital gains allowances

Either way tax is only payable when profit is realised, i.e. every time a sale is made a profit or loss is realised and tax is payable on any profits.

Based on most people’s outcomes with day trading you will be lucky to repay yourself the 10k loan, hopefully you will prove me wrong.

Thanks for your concern.

So following up from what you said, I guess my question is, does every trade I close with my broker count as realised profit? Although I haven't paid it into my company's bank account and still sits in my trading account with the brokerage I signed up with?

[Kenny@MyAccountantFriend]

Yes each closed trade would create a profit or a loss to determine any tax payable.

If the business is day trading CGT may not apply as an individual as well as it is viewed as a trade as opposed to investment, so may explain the decision to go via a company.

[stek]

I think what's likely to happen is the 10k will be turned into 0k pretty quickly, minus the broker's commission of course. They are the only winners in these games....

[CupidAlaska]

Surely, if you lent the £10k to the company, you would have transferred it into the company bank account and then transferred it from there, to the broker.

The £100k would then be paid by the broker to the company bank account and your company transfer £10k back to you.

At the moment, it sounds like you've set up a company with a balance of £0 and given £10k of your money to some bloke.

<- I don't follow?


I wouldn't transfer all of the 100k back into the company bank account, that would mean that I couldn't continue trading. In this instance, I would transfer 10k from my trading account back into my business account and then back to me. So I don't understand your last point about giving money to a bloke? When I say broker, I mean my online trading account. I am the broker.

[CupidAlaska]

I think what's likely to happen is the 10k will be turned into 0k pretty quickly, minus the broker's commission of course. They are the only winners in these games....

Do you have anything else to contribute instead of mocking?