Hi Dublin
This is news to me and goes against my general view that you should not really own investments through a company. Can we work through a few examples.
I invest, in my own name, €200k to buy 10% of Gadgets Limited.
I sell my shares in Gadgets after 5 years for €300k. I pay 33% CGT on my gains of €100k.
If I invest via Burgess Investments Ltd, the BIL sells the shares after 5 years for €300k and the gains of €100k are in BIL free of tax. I now have a company which has €300k cash. How do I get it out? Surely I will pay 33% CGT on the €100k gain, so no saving.
What happens if there is a loss?
Gadgets Ltd goes bust , I have a CGT loss of €200k if I invest myself.
If I own it through BI:, I will now have to wind up BIL to get the €200k CGT loss?
The costs of administration
It's just so inefficient to own shares or other investments through a company.
- The cost of setting up.
- The cost of CRO returns and the potential for errors.
- The cost of tax returns and the potential for errors.
- The cost of winding up the company.
If there is a legal dispute with the fellow shareholders, it will be so much more difficult and expensive to pursue via a limited company.
In short, the tax advantages would have to be huge to justify holding shares through a company.
Companies can be useful for trading operations because of limited liability and the more flexible pension contributions arrangements, but I haven't heard anything to justify setting one up to hold investments of any sort.