Stockbrokers for Investment Clubs Sep’25

poseidon1

Arthur_Pewty said:

We are looking at becoming a Private Limited Company.........are therr any major problems

See my post at 21 October 3.20pm.

 Incidentally, I subsequently  changed my mind about LLPs.

  I suspect Investment clubs  as passive investors might not pass the HMRC business/trade criteria to be accorded LLP tax transparency status. There is a danger that income/ gains maybe liable to corporation tax if HMRC view it as a mere investment holding entity rather then a business enterprise.

I do wonder if any of the proponents of the LLP alternative structure  have actually sought expert tax advice on this issue, before jumping in.

Arthur_Pewty

We have today formed a limited company for our investment club.  Didn't take too long and cost just £50 at companies house.  Now need to register with HMRC for a UTR, get an LEI and apply to AJ Bell for a dealing account.  AJ Bell have confirmed they will support our application. Will report on progress.

poseidon1

Arthur_Pewty said:

We have today formed a limited company for our investment club.  Didn't take too long and cost just £50 at companies house.  Now need to register with HMRC for a UTR, get an LEI and apply to AJ Bell for a dealing account.  AJ Bell have confirmed they will support our application. Will report on progress.

Presumably after considering all the tax implications ( Corporation and personal) as well as the  new additional compliance and accounting costs, you considered this  a worthwhile annual outlay to access AJ Bell's platform?

Hopefully your collective annual income and gains will make this transition to company status worthwhile, and you will not be planning to issue annual dividends  from the company to members (double taxation). 

Oldhead45

All going well with CFM transfer - all shared have migrated and I can see them on line in my CFM account.  There's obviously more going on but moving quicker than anticipated!

phlebas192

I do hope that those pursuing alternative legal structures do report back on how they fare. Our own IC (with assets of high hundreds of £000s) decided it wasn't worth it from a tax angle. But there again we have no experience of running a limited company or LLC so maybe we've missed something. 

Our club has been dissolved and the assets have been distributed to individual trading accounts with ii. By taking advantage of the "recommend ii" £200 payments, the offer of no monthly fees for 12 months and up to £100 trading credits this has proved a decent option. Now its mostly a case of transferring our holdings into ISAs to save on future tax.

Euro_Skank

Just out of interest, what caused investment clubs' demise? 

phlebas192

Euro_Skank said:

Just out of interest, what caused investment clubs' demise? 

Interactive Investors was the only mainsteam broker that offered investment club accounts. In August they announced they were withdrawing these accounts with just 6 weeks notice. 

Ironically (?) the only reason ii had a large number of such accounts was that a few years earlier they took over the business of Share Centre and presumably that decision was based in part on the investment club accounts that Share Centre had.