Setting up an investment company from trading company

canary4

Hello, I would like to set up an investment company using the profits from my trading company. I'd like the family to benefit form the investment company. I know this is a broad question but any advice on how to get started please? I'd like the family to benefit from the company (when I'm dead) and the long term goal is to use all the investments to buy a holiday let property via the company in about 10 years. In this way we can also use the asset. I'm starting initially with around £300k. Many thanks. I'm 48 by the way.

uknick

The Financial Conduct Authority might be a good start as they are responsible for regulating investment companies in the UK. 

PHK

I’m afraid this has bad idea all over it. What you are doing is called a collective investment scheme. Investors put their money into the scheme which is used to buy/manage/build property. Their returns are based on increases in property prices or the property being worth more than it cost to construct. You would make money from the difference between what you pay out and what the property is worth. 

It’s unregulated but the FCA are cracking down on these schemes.  

You’d only be able to accept investments from high net worth investors (value excluding property and excluding pension of greater than >100K) or what’s called a sophisticated investor (with years of experience of high risk investment). 

So yes, speak to the FCA first.  

magicmoneyportaloo

A SSAS pension scheme might better achieve your objectives:

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/defined-contribution-small-self-administered-pension-schemes

metropolis090

If you want the family to benefit after you are gone, you should look into creating a holding company with a trust structure. That way, profits from your trading business can flow into the investment arm and later be passed on efficiently. Speak with a tax advisor before moving funds, because inheritance rules can be tricky.