Limited Company Investment Bonds ?

ttmtmt

I have a small Limited Company with £50,000 in profits to invest.
The company has no outstanding debts and I would like to use this money to get the best return in the most tax efficient way.

I have been looking into investment bonds. Would this be the best way to get a return from the profits.

AnotherJoe

This is like saying "I've been looking into shares." Eg it's far too general.
It would depend what the bonds are, but many so called bonds are nothing more than high risk loans disguised as bonds with misleading wording and others are looking to me to be scams.
Do you have no way to invest the money in your business ?

xylophone

Make a company contribution to your pension?

ttmtmt

I could Make a company contribution to your pension this but I was hoping to try and get a return on this money now if possible

ttmtmt

AnotherJoe wrote: »

This is like saying "I've been looking into shares." Eg it's far too general.
It would depend what the bonds are, but many so called bonds are nothing more than high risk loans disguised as bonds with misleading wording and others are looking to me to be scams.
Do you have no way to invest the money in your business ?

I know this is general but to be honest I don't have any experience in this area and I'm looking for the best way to proceed.
I would like to invest the money so I can get a return.

dunstonh

I have been looking into investment bonds.

onshore or offshore investment bonds?
What accountancy method do you use?

I could Make a company contribution to your pension this but I was hoping to try and get a return on this money now if possible

Investment bonds and pensions share the same investment options. So, why would there be a return on the bond but not in the pension?

ttmtmt

dunstonh wrote: »

onshore or offshore investment bonds?
What accountancy method do you use?

I have generally been looking at investment bonds and haven't got as far as the type of bond.
I have an accountant who does my books if thats what you mean

dunstonh wrote: »

Investment bonds and pensions share the same investment options. So, why would there be a return on the bond but not in the pension?

I thought I wouldn't get a return from a pension before I retired as such

AnotherJoe

Classically, either you retain spare money in your business and use it to expand and generate more income, or if you cant utilise it you return it to the shareholders, which would presumably be you.
If you dont know enough about investments such shares and bonds to even be able to describe what sort of return you'd expect over what period of time, and what bonds you are talking about*, either put it in your pension which provides a very good return but locked away, or start learning. There are books and there are websites. Monevator as a website for instance.


* I'm going to guess you've seen an advert for something like "guaranteed 8% interest rate bonds" which are neither guaranteed nor bonds.

ttmtmt

AnotherJoe wrote: »

* I'm going to guess you've seen an advert for something like "guaranteed 8% interest rate bonds" which are neither guaranteed nor bonds.

Yes I have seen this sort of advert and I don't know enough about investing so I will have to start learning.

I would like to use this money to pay off my mortgage but have been advised this is not tax efficient.

I would be happy to get a return of £4000 pa which would cover my mortgage payments.

AnotherJoe

ttmtmt wrote: »

Yes I have seen this sort of advert and I don't know enough about investing so I will have to start learning.

I would like to use this money to pay off my mortgage but have been advised this is not tax efficient.

I would be happy to get a return of £4000 pa which would cover my mortgage payments.

So would we all but that's not available without very high risk verging towards fraudulent products which could lose you all your money. it's clear there's a scam going on because if I could offer 8% guaranteed which is about 6% higher than any standard product, why wouldn't I offer 3% and pocket the 5% myself? So just forget that figure, it's not real.

dunstonh

I have generally been looking at investment bonds and haven't got as far as the type of bond.
I have an accountant who does my books if thats what you mean

Investment bonds can be suitable for a business but the accountancy method used can impact on the effectiveness. For example, on a historical price basis. the value of the bond is only adjusted on the books if there is a transaction in the bond (such as a partial surrender). So, gains and losses can get deferred into future years with careful financial planning.

There is not one way of doing accounts. A director should know the accountancy method for their business. it is part of your annual accounts submitted to companies house and should appear in the notes

Offshore bonds are normally more suitable for businesses than onshore bonds.

I have generally been looking at investment bonds and haven't got as far as the type of bond.

Most consumers wouldn't know what an investment bond is as its not on the more common tax wrappers nowadays.

Are you sure you are talking about investment bonds?