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Investments for a limited company

Investments for a limited company

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I have a client who has a cash-rich limited company but is worried about the stability of the banks and is looking for somewhere to invest his money.  He has considered taking the money as a directors loan so that he could spread the cash around in various personal bank accounts, but would he be better off from a tax point of view in making investments in gold/ other investments which are then held by the limited company?

Also, if I give him the options regarding this, would it be considered investment advice which I am not covered for by ICAEW (not having a DPB licence)?

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By Chris Smail
12th Jun 2012 13:43

Do not advise, do not recommend one individual.

Be nice, say you are not authorised to give this sort of advice but here are the names of three people who are, I suggest you talk to them all and decide who you can work with.

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Teignmouth
By Paul Scholes
12th Jun 2012 14:35

Another word of warning

With interest rates being so low at the moment this is a common problem.  Watch out though if the client looks to place any funds long term as, depending on the sum involved and the size of the balance sheet, HMRC might say that the company has an investment element thus losing capital tax benefits applicable to trading companies.

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By Richard Willis
12th Jun 2012 16:51

Genuine question, by way of education.

Would there be any benefit in setting up an investment subs. funded by inter-co loans?

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By dreamcatcher
13th Jun 2012 11:24

Employer pension contributions

Again I echo what has been said before be careful what you say because unless you are authorised to give financial advise you could easily find yourself in trouble here.

By drawing the money via directors loans surely there would be S419 and a BIK on the director to consider and are interest rates really much better for individuals.  Some corporate treasury deposits still offer reasonable returns on deposits.

With any cash rich business I always ask if they have considered employer pension contributions?  It can go some way to solving the cash rich problem and the company gets the CT deduction.  This of course all depends on the clients age and attitude to pensions but always worth considering in my book. 

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By Roland195
13th Jun 2012 11:40

Significant amounts

Without giving unlicensed investment advice, I find that we would have to be talking about significant amounts of cash to make investing in something other than treasury deposits worthwhile. Again we would have to be talking about serious amounts of money to jepordise the trading status though.

If he is worried about the failure of the major banks, then your client will have much bigger problems. If he is truly worried then his best investment would be tinned food, bottled water & a shotgun.

 

 

 

 

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Replying to MBK:
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By Richard Willis
13th Jun 2012 13:47

Oh dear

Roland195 wrote:

If he is worried about the failure of the major banks, then your client will have much bigger problems. If he is truly worried then his best investment would be tinned food, bottled water & a shotgun.

Roland, I hope that you are not suggesting that our glorious government would allow us to sink into a state of anarchy.  Oh, sorry, of course it has already started!  Of course I deplore your suggestion of a shotgun; random acts of violence are not to be encouraged.  Something like an AK47 (I wonder if that rang bells in Special Branch?!) would be far more accurate!

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Replying to DJKL:
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By Roland195
13th Jun 2012 14:01

Deterrence

Richard Willis wrote:
Roland, I hope that you are not suggesting that our glorious government would allow us to sink into a state of anarchy.  Oh, sorry, of course it has already started!  Of course I deplore your suggestion of a shotgun; random acts of violence are not to be encouraged.  Something like an AK47 (I wonder if that rang bells in Special Branch?!) would be far more accurate!

The shotgun is a mainly a deterrent but loading it may become necessary should your neighbours discover your stash of evian & spam.

Interestingly, come the revolution, the only ones with access to firearms will be the armed forces & police who history shows will be the ones leading the charge. The only people who could mount a serious opposition will be the drug dealers.

 

  

 

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