Tax: Business HL Vantage Fund & Share Account

tjd08

Hi,

I am considering the implications of setting up a DD each month to pay money from a business account into a business-owned Vantage Fund & Share account (with Hargreaves Lansdown) in the UK.

I was wondering if anyone would be able to provide some guidance on the tax-related implications of doing this please, or other considerations to be aware of. I am aware that drawing funds to put into personal ISAs/SIPPs is far more tax-efficient, but the aim is to keep funds within the business if possible.

Our intention is to have a percentage of the portfolio drip-feeding dividend or interest payments (not sure which yet) into the business (annually), but for the most part building a nest egg from year-end profits. Again, I suspect there might be tax to pay on this drip-feed income (beyond the 10% on dividends, or 20% on interest).

Any help would be most appreciated.

xylophone

Have you checked with HL that a company account will be permitted?

http://www.contractoruk.com/money/how_to_invest_my_companys_leftover_cash.html might be worth a look?

tjd08

Thanks for the link xylophone - I have been struggling to find useful info on this.

Corporation tax will only be applicable (I presume) during the years where our company realises a profit, based on annual profits as a whole. One of the whole aims of this approach (in later years) to provide an additional income from good years of trading (when more money is poured into the portfolio).

I guess I'm curious to know if a company can offset it's corporation tax liability by pouring more funds into an investment portfolio. I suspect not, in which case I'm unsure how I'd go about reconciling the Direct Debit payment each month!

xylophone

Have you thought about consulting an accountant/Independent Financial Adviser?

http://www.unbiased.co.uk/find-an-adviser?gclid=CIHQ6dPu2cACFazItAodYlkA2g

DesG

From: http://www.tddirectinvesting.co.uk/choose-an-account/other-accounts/

Company Account
A company Account allows you to trade in the name of a UK Limited Company. It offers the same benefits as a Trading Account trade online or by telephone in a diverse range of investments such as UK and international equities, funds, warrants and securitised derivatives such as covered warrants. Two named people are able to trade on the account.

DesG

tjd08 wrote: »

I guess I'm curious to know if a company can offset it's corporation tax liability by pouring more funds into an investment portfolio. I suspect not, in which case I'm unsure how I'd go about reconciling the Direct Debit payment each month!

No, it's like putting the money in a deposit account, it is just a company asset, except if you have gains/losses which will then affect your corporation tax.

You would need to check with an accountant on when gains/losses need to be accounted for, annually, or only on disposal.