Invest as an individual or as a company (PIC, LTC)

ChilliBob

Thanks for your comments, especially regarding SIPP, an area I need to look into more. I didn't know for example that you can take a chunk out tax free at 55

I will be able to fill the SIPP, ISA and Junior ISA for my son and still have more to invest so I think I'll just go down the conventional route as opposed anything fancy. 

I've recently been suggested something from St James Place as the tax benefits from Isle of Man seem good, but I need go research this further and see what the offering is and their fees

eskbanker

ChilliBob said:

I've recently been suggested something from St James Place as the tax benefits from Isle of Man seem good, but I need go research this further and see what the offering is and their fees

You won't find many recommendations for SJP around here, as their (well-concealed) costs are eye-watering....

ChilliBob

Oh very interesting, this recommendation was from someone quite a bit wealthier than me to say the least. The lack of tax on dividends seemed to appeal to him along with other benefits. When he mentioned quarterly calls etc I did think that may be the case. 

Does that go for anything Isle of man based? Or just sjp? As someone who's hoping to use their investment pot as an income as opposed to a conventional salary dividends would be useful, as would the tax side of things
This same person was discussing how vcts and crowd funding, whilst *very* risky had attractive tax credit options. If I did use them I think it would be for a very small percentage, more just out of interest really. 

eskbanker

I'm no expert on international taxation but in general, if you're a UK resident and taxpayer then all your income and other earnings are taxed here, even if foreign jurisdictions haven't done so already, so just because dividends aren't taxed elsewhere it doesn't necessarily mean that you won't end up paying tax on them at all - perhaps there may be creative ways around this though....

P.S. The above should be read in the context of personal rather than company taxation!

NottinghamKnight

UK taxation can be deferred by using offshore bonds of course but there would still potentially be tax to pay in future years, and such options may be higher risk and will generally come with higher charges, which may be where the SJP connection comes in. I did some work on the IoM and as a local gleefully pointed out you just have to look at their flag to see how things work out (three legs meaning we always land on our feet). 

NottinghamKnight

ChilliBob said:

Oh very interesting, this recommendation was from someone quite a bit wealthier than me to say the least. The lack of tax on dividends seemed to appeal to him along with other benefits. When he mentioned quarterly calls etc I did think that may be the case. 

Does that go for anything Isle of man based? Or just sjp? As someone who's hoping to use their investment pot as an income as opposed to a conventional salary dividends would be useful, as would the tax side of things
This same person was discussing how vcts and crowd funding, whilst *very* risky had attractive tax credit options. If I did use them I think it would be for a very small percentage, more just out of interest really. 

VCTs can be an option, 30% tax relief and you are only committed for 5 years but they can be iliquid so difficult to sell, but the divis are tax free. I've got a small portfolio of VCT and the dividends are good though charges are high, currently down about 8% on average but arguably 22% up plus divis including tax relief, also see as a useful way into smaller companies which I think the UK does pretty well with.  
Not sure what the crowdfunding approach is, maybe eis or seis which I've had a look at but didn't understand as well as vcts so left alone.

ChilliBob

This was a pretty small part of a conversation, but I got the impression you'd get Dividend payments and pay zero tax on them, but that if you sold your holding you'd still pay cgt on it. I've not had a chance to look in great detail mind! 

ChilliBob

Crowd funding I believe is eis
30% relief and if it folds 40% tax credits on investment I think, or something :0