Business investing in equities

stphnstevey

Anyone investing in equities through their company?

I believe an LEI is needed now and Interactive Investor (amongst others) appears to offer a reasonable trading account for businesses. Any experience with this or others?

Is there any special accounting rules for this?

Thanks

kidmugsy

You receive ordinary dividends tax-free. I don't know about the payments from, for example, preference shares or REITs.

stphnstevey

kidmugsy wrote: »

You receive ordinary dividends tax-free. I don't know about the payments from, for example, preference shares or REITs.

Sorry, can you expand on that, so dividends are not charged to corporation tax at the rate of the investment company?

kidmugsy

stphnstevey wrote: »

Sorry, can you expand on that, so dividends are not charged to corporation tax at the rate of the investment company?

The dividends your company receives are untaxed in your company's hands.

The dividends it pays out are taxed on the recipient. They cannot be offset against your company's Corporation Tax liability, in contrast to - for example - salaries, pension contributions ...

Thrugelmir

stphnstevey wrote: »

Anyone investing in equities through their company?

Have you a particular purpose in mind for investing through such a vehicle?

stphnstevey

Thrugelmir wrote: »

Have you a particular purpose in mind for investing through such a vehicle?

Excess company funds from my business which I didn't want to languish in a low paying company bank account mainly

I am not able to extract them tax efficiently currently, beyond the standard company pension payments, dividends and salary

Some needed short term for future tax bills (I might hold back a reserve for this as I realise equities is not a short term investment)

Rough plan to extract via Entrepreneurs Relief when retire (if still available and company still in existence) or convert to a closed investment company and drip feed out as alternative to pension

Anyone else using a company to invest? Which platforms?

Prism

I looked into this a while back and decided there was some risk that by investing in equities in a limited company its possible to accidently convert your company into closed investment company and then mess up corp tax and entrepreneurs relief down the line. One way seems to be to set up a second company which you then loan money to from the first but I couldn't be bother with the hassle.

So currently I am using a zero fee (zero interest) current account for a cash buffer and month to month expenses. Fixed term business accounts (between 1.7% and 2%) for corporation tax saving. I am considering using Ratesetter P2P for additional amounts at around 5% currently.

kidmugsy

Prism wrote: »

I am considering using Ratesetter P2P for additional amounts at around 5% currently.

How will the payments received be taxed? Corporation Tax, I assume, so that you can set them against expenses?

stphnstevey

kidmugsy wrote: »

How will the payments received be taxed? Corporation Tax, I assume, so that you can set them against expenses?

I currently invest in multiple P2P platforms through my company, although this thread was about investing in equities through a company!

My accountant helps me in offsetting any losses due to defaults and fees versus income from interest. You pay CT on any profits.

There are various different methods used but I have seen Fair Value accounting (IFRS9) quoted as the method to use

However I wouldn't recommend any higher risk P2P than maybe Ratesetter, even then Ratesetter is not a recommendation, although I would be happy to refer you to Ratesetter and also other P2P platforms if you wish. Times have changed in P2P and for me defaults are far outweighing the returns now markets have matured and loans are starting to need repaying

kidmugsy

stphnstevey wrote: »

Times have changed in P2P and for me defaults are far outweighing the returns now markets have matured and loans are starting to need repaying

Thank you for the warning.

stphnstevey

Im applying to Hargreaves and Lansdown. Called yesterday and they said a company account was available. I asked about LEI and he said he couldnt see it on the form. He checked and came back saying that I will need a LEI to deal in equities. Might fill out forms and see how far I can get without one

I have gone with H&L for share dealing as Interactive Investor has a £90 annual fee and although it can be used as a dealing credit, I dont think I will be trading that much, preferring a buy and hold strategy

H&L normal share dealing charge is £12, compared to III £10, but have a £1.50 RS account in the same way III have it for £1
H&L RS is limited to a smaller number of ETFs, FTSE 350 shares and ITs. But there is some world and S&P 500 trackers I would use. The list is here, but trying to do this form my personal share dealing account, there are more than is on this list
https://www.hl.co.uk/investment-service ... ar-savings