Interest on Company Money

by **MarkTW** on Mon Jun 20, 2011 11:17 am

I sold my company last year and I have considerable funds in a company bank account on which the bank pays 0.6%. There are no other options available to company funds. If I withdraw the cash I will be liable for the tax on it and I would prefer to leave the cash there so I dont have to do that, as I dont need it.

As the bank will pay 2.9% on 1 year fixed accounts for personal money, I had the idea of transferring the funds into a private account and paying the interest into the company account to pay the tax on it. With the view that the funds are still the property of the company and could be transferred at any time back to the company account.

My accountant tells me this is not possible and that the Inland Revenue would insist that the tax was paid on the funds transferred.

It is not my intention to do anything devious other than swerving the banks swingeing policy not to pay interest on company cash.

Has anybody had experience of this situation and found an answer to it?

by **pawncob** on Tue Jun 21, 2011 5:56 pm

If you sold the company, why are the funds in a company account rather than a personal one? Or did the company sell shares in a subsidiary?
Banks make you declare that you don't hold the funds as a Trustee, so you can't invest in your own name.The only way around it is to invest elsewhere in the company's name.

by **Incredulum** on Wed Jun 22, 2011 10:25 am

http://www.businesshigh5.co.uk/ 2.34% Or you can invest in bonds?

by **MarkTW** on Wed Jun 22, 2011 11:12 am

pawncob wrote:If you sold the company, why are the funds in a company account rather than a personal one? Or did the company sell shares in a subsidiary?
Banks make you declare that you don't hold the funds as a Trustee, so you can't invest in your own name.The only way around it is to invest elsewhere in the company's name.

What I did was sold the assets of the company. I have been unable to find any investments paying a decent rate which I consider safe havens. Any suggestions would be most welcome.