Entrepreneurs' Relief

[Moscow Mule]

No, it's the stock value. Physical assets and goods for sale.

Gotcha.

[duducontractor]

er and investing cash in company

thanks guys.let me try to simplify my question

i have about 70K left in my company bank account.i own 65% of the company shares and my partner owns 35%.she is just a company sec.

current bank interest rates give nothing.so we are considering taking some asset based HSBC products which will give around 15-20% returns per annum.

i just wanted to if this will have an adverse effect on ER as and when i decided to wind up my company. my accountant says it might.I am not convinced.
I donot intend to close my company in the next 3-5 years anyway.

the amount i want to invest is more than 20% of my assets ( aka money in bank) , the returns per annum should be less than 20% of profit and i spend no time on this as HSBC is doing the investment for me.

thanks
sp

[malvolio]

So which bit of my earlier answers did you not understand?

You can do it but you don't get taper relief on CGT when you finally do close down the company and your annual CT rate will be 28%, if Hector decides you are an investment company.

In this context, money in the bank is not an asset, BTW.

HTH

[Clare@InTouch]

In order to qualify for ER the company has to be a trading company for the year preceeding cessation. A trading company is one that is trading (surprise there) and not carrying on other activities to a substantial extent.

Substantial for this purpose means at least 20%.

It does not matter how much time you personally spend on making the investment, so the fact that you give HSBC the money and they invest it isn't important.

[duducontractor]

er and investing cash in company

hiya
cool - thanks all...
from some quick calculations 28% CT is much more than what i will gain
i was hoping that i could invest for a few years (say3 years) or something,make gains and return to normal...run company for 2 more years and close it down..

thanks
sp