money in stocks/shares - business expense?

mrpete

hey,
i am self employed, do a few things, mostly web related. if i buy stocks/shares is this tax deductable (ie an expense)?

dunstonh

No. Costs involved in personal investments are a personal thing and not a business expense. They are deductable in respect of capital gains tax though.

mrpete

oh ok. how (if i could) would i make it a business expense?

mrposhman

I'm not too sure if you can, but if you can they would have to be held as assets within the business.

Blah99

If you're a limited company, you could make a director's loan to the company, then get the company to invest in shares. That would theoretically make you (personally) immune from losses as your company could lose the investment but would still owe you the director's loan (providing it makes enough profit to cover). Not sure why you want to do this though, because you'll have to deal with corporation tax on your profits, then personal tax on whatever you pay yourself out of the profits.

sabretoothtigger

Tax on profits doesnt sound so bad when avoiding any absolute loss though if you own the company its not exactly free

Blah99

sabretoothtigger wrote: »

Tax on profits doesnt sound so bad when avoiding any absolute loss though if you own the company its not exactly free

That's the thing about it. If your company is successful enough to generate enough profit to cover the losses and repay your loan, then it's okay. But if you do it this way your company is paying corporation tax at (say) 21% on your profit, then you're paying income tax + NI on it when your company pays you the profits. You can't use your CGT allowance against it either, as it's not your loss.