Share trading account for Ltd company?

[TheGreenBastard]

If you had a point, it was lost in your terrible English. You’re probably very agitated, but try to relax .

The guidance is vague because the actual legislation is constructively vague, much like the TAAR. The words “wholly or mainly” are lifted directly from the legislation.

https://www.legislation.gov.uk/ukpga/2010/4/section/18N

Perhaps project less on other people's emotions, it's a weird look, also consider I may be a non-native speaker? Common law is vague in part due to its dependence on case law.

Do you think it's a worthwhile idea to split your businesses up, maybe having a separate one for IT, one for property, etc, or just keep them all as one company?

For property your hand will be forced unless you repurpose an existing Ltd. with new SIC codes due to lender criteria, assuming a Ltd. group you'd only need 2 Ltds. if you wish to finance the property Ltd. with proceeds from your active IT consultancy. Repurposing a Ltd. for a single property might be a messy endeavour, but perhaps worthwhile if you want to make a go multi-property investment. It's also worth considering that a group company setup (IT consultancy financing a BTL SPV Ltd) is invalid for some lenders, "layering" your business like this invalidates their criteria - often it's the mortgage providers with the best deals that don't support layering as they want nothing to do with inter-company risks.

[northernladuk]

For property your hand will be forced unless you repurpose an existing Ltd. with new SIC codes due to lender criteria, assuming a Ltd. group you'd only need 2 Ltds. if you wish to finance the property Ltd. with proceeds from your active IT consultancy. Repurposing a Ltd. for a single property might be a messy endeavour, but perhaps worthwhile if you want to make a go multi-property investment. It's also worth considering that a group company setup (IT consultancy financing a BTL SPV Ltd) is invalid for some lenders, "layering" your business like this invalidates their criteria - often it's the mortgage providers with the best deals that don't support layering as they want nothing to do with inter-company risks.

Hasn't something also changed very recently making a contractor with a LTD and a second for SPV very unattractive? I thought I was an article or thread on it. Something to do with close companies or combined CT?

[TheGreenBastard]

Hasn't something also changed very recently making a contractor with a LTD and a second for SPV very unattractive? I thought I was an article or thread on it. Something to do with close companies or combined CT?

"Very unattractive" is would be false, depending on the scale of your business(es). Single property SPV? Don't bother the new rules will hurt.

The tax changes are a drop in the ocean in regards to turning a profit via BTL. BTL in your personal name was killed with expenses changes, now Ltd. company BTL is dead (to new entrants) due to a mixture of interest rate increases, and potentially increase in rights to tenants which BTL investors would argue go too far. The interest rate increases mean the cost of debt has destroyed profit margins, even if you have a LTV that results in headline profit margin looking OK, it will likely be on par or only similar to what you can get in a high interest savings account (of course without all the risk). Also consider capital appreciation is no longer guaranteed, prices might be down, but on the balance of things house prices still are not rational in relation to cost of debt. With current market conditions I can't see asset appreciation being depended upon.

I have real concerns for the rental market in this country, especially for the tenants, availability is drying up (landlords selling up) and there's no incentive to invest. Rental costs are already sky high.

[jamesbrown]

Perhaps project less on other people's emotions, it's a weird look, also consider I may be a non-native speaker? Common law is vague in part due to its dependence on case law.

I think the weird look is all yours.

If you're in agreement that both the legislation and case law remain vague, I've made my point that you cannot clearly identify where the line is crossed between a regular close company and a CIHC. It will depend on the facts. That is "constructive ambiguity" or opportunity from HMRC's POV.

Bottom line, if you're investing company cash, don't invest too much (as a fraction of net assets), don't make too much profit (as a fraction of net profit), don't engage in any weird/artificial arrangements, such as letting properties to associated individuals/companies, and don't stop doing your main trade for any significant period, certainly not a full accounting period. That's quite a lot of "don't", hence the typically conservative advice you will see here and elsewhere. If you're in any doubt that HMRC will pursue, until the bitter end, arrangements that are seemingly completely vanilla, look at HMRC's loss to Kaye Adams w/r to IR35 (reported yesterday) on their fourth attempt at FTTT.

[TheGreenBastard]

I think the weird look is all yours.

If you're in agreement that both the legislation and case law remain vague, I've made my point that you cannot clearly identify where the line is crossed between a regular close company and a CIHC. It will depend on the facts. That is "constructive ambiguity" or opportunity from HMRC's POV.

Bottom line, if you're investing company cash, don't invest too much (as a fraction of net assets), don't make too much profit (as a fraction of net profit), don't engage in any weird/artificial arrangements, such as letting properties to associated individuals/companies, and don't stop doing your main trade for any significant period, certainly not a full accounting period. That's quite a lot of "don't", hence the typically conservative advice you will see here and elsewhere. If you're in any doubt that HMRC will pursue, until the bitter end, arrangements that are seemingly completely vanilla, look at HMRC's loss to Kaye Adams w/r to IR35 (reported yesterday) on their fourth attempt at FTTT.

Nah, it's pretty damn weird to project people's emotional state, probably a little bit of narcissism mixed in with it, to assume I would care enough about what you say for it to effect me.

Most of what you say assumes the OP will turn into Gordon Gekko, most of his income will come from investments etc. The normative case is that a few 10s of K are put aside, as usual you present the extremes as the norm. The OP has explicitly implied this wouldn't be the case, and I took that at face value. Now your classic smart arse crap predicates on his investments becoming wildly successful after using all company proceeds. After becoming a great investor I doubt they will care about CIHC.

Case law like Herts Photographic Bureau Ltd v CRC [2010] UKFTT 629 (TC) is interesting too.

[courtg9000]

One of MyCo's had a Share dealing account in the past.
It was useful and having one is not a total indicator of being a CIHC. Watch the trading level though.
There were times when owning some stock was attractive to the business and as I modelled MyCo on a "private trading office" with multiple income streams I never had this issue. To be fair the trading level was very low. Not even 20 trades a year, many of these had a business reason as opposed to an "investment reason".

[jamesbrown]

Nah, it's pretty damn weird to project people's emotional state, probably a little bit of narcissism mixed in with it, to assume I would care enough about what you say for it to effect me.

Most of what you say assumes the OP will turn into Gordon Gekko, most of his income will come from investments etc. The normative case is that a few 10s of K are put aside, as usual you present the extremes as the norm. The OP has explicitly implied this wouldn't be the case, and I took that at face value. Now your classic smart arse crap predicates on his investments becoming wildly successful after using all company proceeds. After becoming a great investor I doubt they will care about CIHC.

Case law like Herts Photographic Bureau Ltd v CRC [2010] UKFTT 629 (TC) is interesting too.

Professional forum. The only thing missing is your usual "slave owner" bile.

[TheGreenBastard]

Professional forum. The only thing missing is your usual "slave owner" bile.

If you had a point, it was lost in your terrible English. You’re probably very agitated, but try to relax .

Hmm indeed.

[jamesbrown]

Hmm indeed.

You'll notice that one involves a sweary meltdown and one refers to your unintelligible posts. HTH.

[TheGreenBastard]

You'll notice that one involves a sweary meltdown and one refers to your unintelligible posts. HTH.

Where did I sear, now you're just imagining things, talk about unhinged. The incessant need for the last word too, troubling.