Investing company profits

[RidgewayPele]

Thanks

If your LtdCo invests, then IT will pay tax on the profit, and you will pay tax retrieving the cash out of the company. As your LtdCo will be investing, then you probably wouldn't qualify for entrepreneurs relief if you wound it up. And chances are dividend tax in the future will be larger than it is today.

IMHO, and this is unqualified advice, you would be better taking the tax hit getting the excess cash out of the company now (rather than simply kicking the tax can down the road, where it has the potential to become a bigger can) and then investing your personal excess cash in whatever medium you see fit.

(I would have thought watches would be a poor investment right now, with the GBP at such a low value. Buying the asset in the first place will be more expensive).

Use your LtdCo to do business trade, and don't let it get caught up in 'non-core' activities.

Thanks I think 'Use your LtdCo to do business trade, and don't let it get caught up in 'non-core' activities.' is prudent advice.

Please note I have googled this subject many times - I can find nothing specifically about watches although there is some information on investment in art etc. However, I will err on the side of caution and stay away from the idea!

[blackeye]

If you plan to leave the money, Invest the retained profits in a global tracker fund and reinvest any dividends, and then pay the extra tax on the growth on the assets.

Surely thats better in the long run than letting the value get eaten away from inflation.

[chopper]

If your LtdCo invests, then IT will pay tax on the profit, and you will pay tax retrieving the cash out of the company. As your LtdCo will be investing, then you probably wouldn't qualify for entrepreneurs relief if you wound it up. And chances are dividend tax in the future will be larger than it is today.

IMHO, and this is unqualified advice, you would be better taking the tax hit getting the excess cash out of the company now (rather than simply kicking the tax can down the road, where it has the potential to become a bigger can) and then investing your personal excess cash in whatever medium you see fit.

(I would have thought watches would be a poor investment right now, with the GBP at such a low value. Buying the asset in the first place will be more expensive).

Use your LtdCo to do business trade, and don't let it get caught up in 'non-core' activities.

[jamesbrown]

This sounds like a bad idea But whether it is or it isn't, you probably want to avoid YourCo being classified as a Close Investment Holding Company, as it has long-term tax implications. If you want to start an investment business, it's generally better to do exactly that, although bare in mind that capital gains are generally more tax efficient outside of a company wrapper.

[Lance]

I think you'll also need specialist insurance. Your home insurance won't cover the companies asset (not officially anyway).

I've claimed for company laptops and mobile phones when I've been burgled, but I never mentioned that they were company assets. I think it might be a very different scenario of you're storing assets for safe keeping rather than using tools in your own home.

[ladymuck]

Most accountants are also not qualified to give investment advice and would be in breach of some regulation or other if they did.

As with anything where your hard-earned cash is at risk, do your research, then do some more. Generally, there'll be an element of CGT on any realised profits and that's where your accountant should be able to offer guidance. You need to decide whether the profits after CGT and insurance costs are worth the risk.

[northernladuk]

Oh.. And if any mention Gold posted by DimPrawn stay well away

[northernladuk]

Problem with asking an accountant is they can't give advice on the investment and if they even acknowledge it you could come back and blame them later if it doesn't pan out. They should really just tell you how the figures work and that's it. I'm sure they've got stories the length of their arms about hair brained ideas that have gone south for a multitude of reasons so not really surprised they don't want anything to do with it.

I thought we had a thread once about a guy want to invest in classic bikes but sound more like he wanted to dabble in a hobby than do it properly.

Dunno what I was doing wrong but seem to remember even after two years I didn't have a bug enough watchest. I was aiming for a year's worth of current standards for my war chest though so maybe playing it too safe.

Plenty of threads with ideas about investing/saving and then like but I can't remember any of them producing anything really viable.

Try searching the forums using Google and a search term like....

Invest company money site:forums.contractoruk.com

Play around with the search phrase.

You are whacking a good amount in to a pension already aren't you?

[RidgewayPele]

Hi

I have been contracting for 2 years now and have built up a reasonable warchest. Obviously like most people this is gaining very little interest and I was looking at some other investment options. One of my interests is watches and I wonder if anybody has experience of using surplus company funds to invest in watches (probably around the 5k mark)? I have read a few articles online about investing in artwork, gold etc. but not specifically watches. Just for clarity such a purchase would be bought with a view to making some money over time, would be kept in a safe in the house in a watch winder box and would not be on my wrist down the pub on a Friday night. Any thoughts? (I asked my accountant who gave me a non-descript reply and I am in the process of looking to change to a different firm due to them being a bit crap generally.)