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Where Taxpayers and Advisers Meet

Set up a Ltd company for Investment income??

Rob.
Posts:1
Joined:Wed Aug 06, 2008 4:09 pm

Postby Rob. » Tue Jun 03, 2008 10:25 am

Hi,

Im going to invest some money abroad and take monthly/annual income from this. As I am a higher tax rate payer already Im not keen on getting charged 40%. So am I allowed to set up a company and set up these investments through the company so that I will only have to pay the 21% corporation tax???

Thanks in advance.

wamstax
Posts:1953
Joined:Wed Aug 06, 2008 3:39 pm
Location:Operate Nationally but based in Aberdeen
Contact:

Postby wamstax » Tue Jun 03, 2008 10:51 am

and how are you going to get the money out of the company and into your hands tax free? You might also have to consider that the company will be a "UK" company chargeable as an Investment Company chargeable to UK corproation tax
regards and hope this helps
bill@wamstaxltd.com
http://www.wamstaxltd.com
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact (mob 07751720507) can be obtained from websites

bob.fraser@towrylaw.
Posts:765
Joined:Wed Aug 06, 2008 3:14 pm

Postby bob.fraser@towrylaw. » Tue Jun 03, 2008 10:51 am

Why not invest instead in investments that are taxed to capital gains tax instead?
The tax on the gains, which you can withdraw as income, is only 18%. And you have an annual CGT allowance of (currently) £9,600. And if you make losses, these can be carried forward to reduce future gains.
Alternatively, if your tax rate in the future is likely to reduce to basic rate, then an offshore investment bond might be an option.
I suggest that you take proper expert financial advice.

Bob Fraser
Chartered Financial Planner

King_Maker
Posts:6538
Joined:Wed Aug 06, 2008 3:22 pm

Postby King_Maker » Tue Jun 03, 2008 3:37 pm

And Bob's strategy can work even better if you are married.

wamstax
Posts:1953
Joined:Wed Aug 06, 2008 3:39 pm
Location:Operate Nationally but based in Aberdeen
Contact:

Postby wamstax » Tue Jun 03, 2008 9:00 pm

and remember that shares/chargeable assets can go down as well as up and somebody somewhere will be taking some of your income as commission
regards
bill@wamstaxltd.com
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact (mob 07751720507) can be obtained from websites

bob.fraser@towrylaw.
Posts:765
Joined:Wed Aug 06, 2008 3:14 pm

Postby bob.fraser@towrylaw. » Tue Jun 03, 2008 11:21 pm

Bill,
Your comment about risk is fair, but please remember that the best advisors are remunerated only by fees, so commission is simply not an issue if the correct advisor is chosen.

Bob Fraser
Chartered Financial Planner

wamstax
Posts:1953
Joined:Wed Aug 06, 2008 3:39 pm
Location:Operate Nationally but based in Aberdeen
Contact:

Postby wamstax » Tue Jun 03, 2008 11:50 pm

Fair point but either way your potential income is reduced and risk increased. Equally if you are creating an income from dealing you might not even get the hoped for 18% tax rate nor the promised AEA of £9,600.
regards
Bill
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact (mob 07751720507) can be obtained from websites


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