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Cryptocurrency Bought on Limited Compay
Keen_Investor
Posts: 10 Forumite
in Cutting tax
Hi,
Is it possible to form a limited company as one person (Myself) being the sole director. Then buy Cryptocurrency using that company.
The reason I ask is, I want to invest in Cryptocurrency over the long term, and reduce tax as much as possible legally on any gains when I eventually sell.
So corporation tax instead of Capital Gains tax. Or are there rules in place that would make this not possible?
Not sure of any implications?
Thanks
Is it possible to form a limited company as one person (Myself) being the sole director. Then buy Cryptocurrency using that company.
The reason I ask is, I want to invest in Cryptocurrency over the long term, and reduce tax as much as possible legally on any gains when I eventually sell.
So corporation tax instead of Capital Gains tax. Or are there rules in place that would make this not possible?
Not sure of any implications?
Thanks
0
Comments
-
Why invest through a Ltd company?
Through a Ltd you’ll pay 19% CT on any gains (this should reduce to 18% in 2020) but you’ll have no allowances and additional costs and paperwork running the company.
Then, to extract those profits from the company as a dividend you’ll pay further income tax on those dividends (7.5% at basic rate and 32.5% higher rate). If your gains are high enough you’d need to consider extracting your profits over multiple years to avoid pushing your total income over the £100k threshold or you’d start losing your personal allowance.
Invest personally and you have an £11.3k tax free CGT allowance and depending on whether you’re a basic rate or higher/additional rate payer and your total gains you’ll pay either 10% or 20% in CGT.0 -
There is no theoretical reason why not, though there is not a great deal of difference in CGT for higher rate taxpayers and corporation tax.
However, how would you then extract the profit from the company without paying further tax?
Edit: crossed post with TheCyclingProgrammer’s much more detailed response!I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.0
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