Historically, it has never made sense for an individual to invest through a company vehicle like a limited company. However, with capital gains tax allowances being slashed, ISA lifetime contribution limits being suggested, dividend allowances decimated etc. I wonder if the calculation is changing, and in a few years, it will be advantageous for individuals that work through limited companies, such as consultants, builders and media workers, to invest through those companies rather than paying out the money and investing it personally.
The current state of company investment accounts is very much geared towards large companies. I am currently going through the process of creating an Interactive Brokers account for my limited company, and it is a complete mess. It is geared toward large companies, hedge funds, treasury managers etc. I am being asked questions that only apply to billion-dollar finance companies. I’ve been asked to apply for an LEI number which costs $160 + $90 per year and, as far as I can tell, only applies to companies that trade options in large quantities. I will not be trading options at all. I am also being asked many MIFID questions, which also do not really apply to my company.
If it is becoming tax efficient to invest through a limited company, I believe Freetrade is ideally placed in the market to offer a simple, cheap service geared toward small businesses so they can begin investing. I have no hope of this being implemented anytime soon, as the one feature limited company directors have been crying out for years is company contributions to SIPPs and is still unimplemented. However, I would like to get the conversation started, in particular, if anyone has opinions on whether this method of investing will be tax efficient in the near future.
have large surplus cash balances just sat doing nothing. If FT offered company accounts, what better way to use the cash.