Large sums of money - investment advice

[Wanderer]

Yes legal, because it's a commercial loan with a market rate of interest.

You can pay interest or not, it's still possible. The advantage of paying interest currently 4% is that it avoids BIK and the interest becomes company profit and gets paid back to you minus tax.

Of course, it implies that the company has enough cash to loan to you for the house purchase.
And why let the cash sit in an offset a/c - just pay the house off no?

That's the whole point. You can borrow the money the company has set aside for CT/VAT/warchest/whatever and when your company needs it back you can withdraw it from the offset account again without any questions being asked.

[jonathanOnshore2010]

Interesting, we were thinking along the same lines....

I didn't realise the "bed and breakfast" clause. I think the convoluted way to avoid it, is to find a 3rd party finance company to make the commercial loan advances to you, secured against your dividend holding and future expection (ie. company reserves). But you'd need to find someone who knows about these things to structure it properly...

[jonathanOnshore2010]

Here's another idea which a multi-jurisdictional accountant once mentioned in passing. I wonder if anyone can comment on this...

Why not take a year long (+ few days either side of the tax year) lifestyle holiday to a lovely location like the Virgin Islands, Bermuda or Singapore. Whilst at the same time becoming a non-uk resident for taxation purposes and deciding to establishing yourself a resident in the holiday location of choice. Which just so happens to coincide with a substantial dividend payment from the company.

[ChimpMaster]

Here's another idea which a multi-jurisdictional accountant once mentioned in passing. I wonder if anyone can comment on this...

Why not take a year long (+ few days either side of the tax year) lifestyle holiday to a lovely location like the Virgin Islands, Bermuda or Singapore. Whilst at the same time becoming a non-uk resident for taxation purposes and deciding to establishing yourself a resident in the holiday location of choice. Which just so happens to coincide with a substantial dividend payment from the company.

IIRC you have to remain non-resident for 5 years or more.

[daveyowen]

Hello All,

Why can't you invest in land under your limited company, if you have sufficient funds ? If you manage to get planning permission for stables/ residential property, any net gain would only be taxable at 20/24% corp tax (unless someone can advise me differently....as I am weak in this area) and can be kept as a pension which you can take as dividends later in life.

If you bought personally, you would have the 4% loan interest to pay, and capital gain tax when selling the land/property.

I am very keen to hear peoples thoughts on this.

Thanks,

Daveyowen

ps. you can buy the land through a SIPP, and save on corp tax, but I personally don't have confidence in life assurance companies.