Ltd Company Investment Funds

[contractorZ]

Worth remembering the earliest age changes from 55 to 57 in 2028 and then remains at 10 years below the state retirement age

[chavvy]

Firstly, thank you for taking the time to provide some insight into this - I am sure there are others with similar questions.

The 20% tests when it comes to trading vs investment are still what's relevant to the best of my knowledge.

There will always be varying opinions, but I think it's generally agreed that having investments inside your contracting company is a bad idea.

It seems to be though that it is not such a bad options if:

a) you are maxxed out on your SIPP already.
b) you don't plan on exercising a MVL
c) you plan to keep it in retirement.

People seem to hate paying personal tax so often seem keen going for the former. My issue is generally speaking all that's typically doing is deferring personal tax.

Any extra cash I take out will be hit at at least 32.5% dividend tax (or 40% if taken as salary).

The downside that you point out is that at somepoint you will be taxed on it, but if treating it as a second pension and using the salary dividend structure it would potentially save a huge amount of money, especially when considering that taking 1000 out now would leave me with 675 (32.5% tax) to invest, leaving it in the company would leave me with 1000 to invest.