Originally posted by northernladuk
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The greatest trick the devil ever pulled was convincing the world that he didn't exist -
Originally posted by LondonManc View PostInteresting. Given it's a long term investment, looks like I'm better taking a short term, one off hit to release the capital and not have to pay 20% in corp tax every year (which could go up or down). Similarly the property is all mine rather than Ltd Co's, which means that it's easier to bequeath to family, etc. I'd rather take the initial tax hit but I could probably do with looking into the letting market as a whole in more detail as well.
You can be paying ~20% on the profits via corporation tax or you can be paying it on your income tax. I suspect, you'd be happier paying the former, as this won't mess with what you take out of the company to live on.
I'm actually leaning towards buying property in an Ltd but I'd rather fully understand the rules before I pull the trigger. Please do feel free to help us get there.Comment
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Originally posted by Louisa@InTouch View PostWhereas, if you don't personally need the funds and are looking to invest, the majority of the time your company could do this and also make the same returns. Then this would remain in the company to distribute at a later date.
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You could look at playing it safe and investing in fixed bonds - with interest as the return on this. Or investing in shares but this will be more risky on the returns.
As long as all of the investments are in the company name.
What you need to look at, is the rate of return more than what you would get personally, after paying taxes on the income.
For example, are you going to get a higher rate of return personally by leaving it in your business;
1 - not paying 32.5% personally (16/17 HR) on the dividend income (assuming HR tax payer in 16/17)
2 - paying 20% corporation tax instead
3 - potentially only 10% CGT rate on closure of your company (assuming no changes to the current rules), plus you'll have your capital gains annual exemption too of £11,100.
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