LTD company property purchase

[Bradley]

19%

Ah never knew that Bradley - thanks for that! So, if a company do a bit of both then does 19% apply throughout or is the 30% applied to any profit from investment? Or do I need to go and Google it myself or read the HMRC website?

If you're predominantly trading then its 19% on all income including investment income.

[ratewhore]

Ah never knew that Bradley - thanks for that! So, if a company do a bit of both then does 19% apply throughout or is the 30% applied to any profit from investment? Or do I need to go and Google it myself or read the HMRC website?

[Bradley]

Investment Company

where does that 30% come from? As far as I was aware you pay stamp duty on the investment, corporation tax on the profit (adjusted down for inflation) then normal salary and dividend tax as you take money out of the company...

the full rate of corporation tax (i.e. 30%) applies to companies that don't trade but just carry on the business of investing. The 19% rate is reserved for trading companies.

[tim123]

Perhaps there was a misunderstanding in my post.

I wasn't moralizing.

When I said that you shouldn't invest the company's cash in speculative investments, I didn't mean that you weren't allowed to do it. I meant that it's not financially expedient to do so.

tim

[ratewhore]

where does that 30% come from? As far as I was aware you pay stamp duty on the investment, corporation tax on the profit (adjusted down for inflation) then normal salary and dividend tax as you take money out of the company...

[Bradley]

I disagree. Putting aside the issue of CGT, what is the difference between doing the 9-5 to generate turnover and investing to generate turnover?

You'll pay tax at 30% in the company for the investing opposed to 19% in the trading. On top of that you may not get a deduction for wages/expenses and anything you take out the company would be taxed at at least 10% i.e 40% overall.

[ratewhore]

I disagree. Putting aside the issue of CGT, what is the difference between doing the 9-5 to generate turnover and investing to generate turnover?

[tim123]

How about if this is extended beyond property to say, equities, commodities etc?

You get the same answer.

As an individual you get some CGT relief for speculative investments.

When investing through your company, you don't. There are some genuine business reasons for a company buying investments, doing it to pay the profits to the principal, isn't one of them.

Tim

[ratewhore]

How about if this is extended beyond property to say, equities, commodities etc?

For example, if I wanted to invest for capital growth then in say, 20 yrs time, convert that to income based investments to pay me a salary.

Is it better to do that in or out of the company?

Thoughts, abuse etc welcome...

[Darren@UptonAccountants]

Cgt

Tim is spot on, if you're holding it personally for more than a couple of years, tends to be better to keep it in your name due to the taper relief available under CGT rules.

[tim123]

What are peoples thoughts on buying property (UK or overseas) through the LTD company?

I have asked my accountant, but just wanted other contractors views.

Thanks in advance.

The general view of accountants is that the loss of GCT reliefs by holding it in the company, knocks any other savings into the long grass. AIUI you don't get taper relief because this is not recognised as a business purchase. And it's a bugger to administer.

tim

[DGA]

I would be looking at keeping the property long term, min 5 years..

Yes the property would be rented.

[Darren@UptonAccountants]

Property

What are peoples thoughts on buying property (UK or overseas) through the LTD company?

I have asked my accountant, but just wanted other contractors views.

Thanks in advance.

How long are you intending to keep the property...also, will it be rented out?

[DGA]

What are peoples thoughts on buying property (UK or overseas) through the LTD company?

I have asked my accountant, but just wanted other contractors views.

Thanks in advance.