Investment spare capital in Ltd company

Nickname

Registered User
Messages
22
I have about 20K to spare each year and haven't got any ideas how to utilize this money. The money can't be reinvested into the business and I dont have any loans to pay off. Down the line I would consider using this pot of cash for a larger investment (i.e. property) or maybe to take on small projects related to my line of work, however I think this is at least 5 years away.

I am open to any guidance on where to look, I would favour something passive or something with fixed income.

For example, is there a product similar State Saving Bonds (I understand this is not available to business only individuals)?

What is the most striaght forward and cost effective way to invest in a fund/ETF?

Any feedback appreciated.
 
You really need to talk to your accountant about this.

In general, you should not be building up cash in the company if you will not need.

Either pay it to yourself as salary or contribute it to a pension fund. This removes the double tax hit of Corporation Tax and Personal Tax.

Brendan
 
I agree with Brendan that you should talk to your accountant.

However I don't agree that you shouldn't be building up cash in your company. Leaving cash in a company does have tax implications/costs and these need to be taken into account when making decisions. Tax efficient exit strategies are available (e.g. retirement relief/entrepreneur relief) and these themselves come with tax issues.
 
I agree with Brendan that you should talk to your accountant.

However I don't agree that you shouldn't be building up cash in your company. Leaving cash in a company does have tax implications/costs and these need to be taken into account when making decisions. Tax efficient exit strategies are available (e.g. retirement relief/entrepreneur relief)

The consensus among serious tax experts is that excessive cash accumulations are inadvisable precisely because they imperil the availability of such reliefs.
 
Thanks all for the feedback. I have a corporate pension which I can increase my contribution but I am comfortable that I am on track for my retirement goals and I would like to have access to money. I think that increasing my wages is probably what i need to consider. I am planning to discuss all of the above with my accountant as well but I like to do some research myself too.
 
I am planning to discuss all of the above with my accountant as well but I like to do some research myself too.

Just be careful as there's no point in having a dog and barking yourself.

All advice given here I would imagine is provided in good faith but most non-professionals have at best only a general understanding of subjects like retirement relief, the practical application of which is littered with potentially disastrous pitfalls.
 
Very good point - I do validate any advice given here especially from tax point of view. I am probably double working but I find that If I have a better understand of my options or at least have an outline of a plan I have more productive discussion with my accountant .
 
The consensus among serious tax experts is that excessive cash accumulations are inadvisable precisely because they imperil the availability of such reliefs.

I wouldn't agree with this and I've never heard of any such consensus. If one considers the current Revenue invention of "excess cash" this has no basis in legislation and merely gives their view of the legislation. It is all how one interprets Revenue guidance, and this is all it is, and advises the client accordingly.
 
I wouldn't agree with this and I've never heard of any such consensus. If one considers the current Revenue invention of "excess cash" this has no basis in legislation and merely gives their view of the legislation. It is all how one interprets Revenue guidance, and this is all it is, and advises the client accordingly.
I think you've just contradicted your own point there.
 
Back
Top