Semi/Early Retirement at a young age

TheTracker

Correction. Above I said you could offset the amortisation of goodwill against other operating profits for corporation tax exposure. This article says this weeks changes will probably eliminate that. Background on the change seems to imply workers such as Doctors have been incorporating to exploit the relief hence the clampdown.

Good luck. Hopefully I've only given you an invalid fright.

C-dog

Have I read that article correctly in that we should be ok on the original valuation? But the goodwill attained is subject to CGT on amortisation?

This is where I'm out of my depth I'm afraid. I'm not sure if this applies to newly incorporated businesses only or those before 3rd December.

I really appreciate your insight and yep, I hope the same.


I'm going to hope this sentence alone is enough: ...which will affect acquisitions on or after December 3rd 2014

C-dog

This looks a little more promising

http://www.accountingweb.co.uk/article/spotlight-goodwill-and-entrepreneurs-relief/569314

C-dog

Just received confirmation from the accountant. As we incorporated before the 3-12-14 this won't affect us.

The milky bars are on me.

C-dog

With two weeks left of the year, we've really been taking stock of our accounts. Especially with the current dip in the market. We have a little bit in our saving account, but our plan is to release a little from our offset mortgage, say £2.5k per 2 weeks and drip this into our trading accounts. Once the annual tax return is out of the way in January, it'll be the plan to "repay" these right away.

Where's the market going? No one knows, but it makes a change from always buying at the false top. This will be the first time in my investing career I'll see any swing for the negative. Excited

C-dog

Week before Christmas and fortunately we've been able to pay down the tax bill. It also includes our on account payment, so thats out of the way for the time being. Exciting going into the new year with no major bills to pay and strong sales to ensure big profits for qtr1.

Decided to take some dividends, so no dipping into the offset mortgage this week. Realised my wife and I are under contributed in last years pensions by a little bit, so we'll first top these up.

I'm having major thoughts about savings now. Once I top up last years pensions I have a sum of about £300k to draw down from the business. This will be taxed at 10%, but once out from the business, I really don't know the best option.

1) Invest it in Vanguard LS100 using a x-o.co.uk or other execution only broker. Bed an ISA it over the years and realise the tax gains annually too.
2) P2P lending via funding circle.Though I am unsure if this is best as I believe it will create taxable income rather than CGT.
3) Look into the next chapter of our life by putting the money into a property abroad. Used as a holiday rental in the shorter term

I'm excited at the options, but other than the title headings above, I know very little about the opportunities available.

Things to consider also. Business partner wants to draw down his half as and when funds permit to pay off his mortgage asap. We've always drawn equally, so will have to consider the best way to do this, or work out a way where I continue to remove my pension amount and they take the draw down.

What would you do?

atush

3) with a little one on the way, dont be putting money into a foreign property.

You wont probably cover costs much less make profit on rentals, it will limit where you go (i ought to know lol) and it will limit your early retirement esp if you are thinking of private school.


Save and invest your cash in ISAs for now.

CKhalvashi

C-dog wrote: »

Possibly. All things we have considered include:

- Having kids (very much on the cards) would not stop our SR travelling plans.
- My family member business partner has a long term illness. Not life threatening, but can restrict their ability to run a business without me. Because of this we are already implemented staffing to reduce both our actual business involvement. This will take many years to accomplish well. But should allow a step back in later years.
- Both sets of parents are aware of the plans, neither really think we'll go through with SR or even a one off extended travel plan (greater than 1 month). This is because I am what you'd term a workaholic.

Congrats on the news.

Staffing is a good way to go, but it needs to be catered for long-term rather than short term. Throughout my illness last year, my company was run by the other director for the majority of the time, and I can't stress enough how much difference an amazing team makes in relation to this.

It's also important to remember that even with one child, you're not going to be able to go travelling until you're at least 50. My age, income and circs are VERY similar to yours, with the main exception of property value and the fact that my youngest is (nearly) teenager now.

They struggle to realise this is for the one and simple goal of Financial Independence. Once I have achieved that my priorities change. To a level, they already have.

Our parents are very much old school. Work until you're 60 and only then could you have saved enough to retire. They see our successes, but can't fathom we could have enough to stop working at a young age.

My parents are much the same. I grew up in an immigrant family, with (for the first 10 years) no interchangability on either of my parents' qualifications from USSR to EU.

They're a lot more understanding now we've shown we're serious about retiring early. It's more the case of sticking to it than anything else.

YoungBusinessman wrote: »

Congratulations on expecting your first child. Also well done on the impressive income, your obviously good at what you do/sell as it works!! Im looking at increasing income(still less than yours...) to fund me paying off £40k debt, my mortgage and then onto next house and saving for early retirement all by age 40....17 years to go......

Nice to see you bouncing back YBM, and it does get better, as myself and OP can vouch. How long are you planning to pay the CCJ over? I'm sure you've posted it somewhere, but I've completely forgotten.

C-dog

CKhalvashi wrote: »

Congrats on the news.

It's also important to remember that even with one child, you're not going to be able to go travelling until you're at least 50.

Thanks CKhalvashi!

We've the potential of a full relocation to consider rather than just travelling now. Its all very much up in the air and the one thing I want to do over the break is to refocus on the business. This is the vehicle that will bring everything closer, so making sure its as profitable as it can be will make decisions so much easier.

So we're about 14 and a half weeks now. Starting to tell people is making it feel real. Scarily real

CKhalvashi

C-dog wrote: »

Thanks CKhalvashi!

We've the potential of a full relocation to consider rather than just travelling now. Its all very much up in the air and the one thing I want to do over the break is to refocus on the business. This is the vehicle that will bring everything closer, so making sure its as profitable as it can be will make decisions so much easier.

So we're about 14 and a half weeks now. Starting to tell people is making it feel real. Scarily real

We deliberately moved out of London when we were sure we wanted to stay in the UK, but kept the company within the M25 (I was doing a Herts to SE19 run for 5 years), but the quality of life was worth it.

Even now (we're based in NW10), the 50 minute commute is more than worth the quality of life outside of London. Something to bear in mind when moving for work.

Kids get scarier as it gets closer (especially the first time), but as DD1 is peering over my shoulder, I'd better say its worth it (it really is!) :cool: