Invest money from my ltd company in freetrade?

I run an LTD company with wife, just ended my first year and have a chunk of cash earning zilch in RBS(although will soon be with starling), mostly cash to cover corporation tax, this quarter VAT and some cash I can wd as dividends from next April (can’t before then as no longer 7.5%)

I’m not looking for a side line as an investment company, just want to stick some money in freetrade that wouldn’t be needed and too expensive to w/d as dividends.

Will this be possible?

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I don’t know about the tax/legal implications - someone from :freetrade: will have to answer on that - but you should make sure you can set the money aside for at least 3-5 years.

If you need the money sooner, you should put it in a savings account rather than investing.

It might also worth be speaking with someone in the government who might be better equipped to answer that kind of question if FT can’t. I’m guessing HM Revenue might be the most appropriate to contact?

My issue would be you’re setting that money aside for future dividends or tax etc, what would happen if in 6 months it has halved in value?

You need to speak to a decent accountant, but my suspicion is that you can’t do what you are proposing for some relatively simple reasons:

  • you open a FT account in your name (not that of the Ltd company) and therefore any assets you purchase belong to you
  • you can’t use the assets of a Ltd company for your own personal benefit exactly to stop you doing this sort of thing ie that they are not your assets (they are the Ltd company’s, which even though you own it the company still is a separate legal entity), plus also to stop people avoiding paying tax on dividends or income.

You might be able to view it as a loan to a director, but I suspect any reputable accountant would tell you that was only possible in certain circumstances.

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Most of my peers who have limited companies are contractors.

They don’t invest their cash holdings because they risk becoming an close investment company, or losing entrepreneurs relief.

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I did this before. I was a contractor. My accountant warned me that if my investment profit exceeds my company’s profit it will be classified as close investment company (CIC).

  • you’ll lose the ability to claim Entrepreneurs relief
  • you’ll pay more tax. At that time it was 28%.

I made a bit of profit and paid Corp tax against it. I think it was 21% at that time. I shut down the brokerage account as I wasn’t too confident that I have the full blessing of my accountant.

My accountant is BKL if you want to ask them.

That was a while ago (4-5 years ago) the rules may have changed now?

These days I just use company money to contribute as much as I can into my SIPP account. It’s more tax efficient imo. Only problem is you won’t be able to access it til mid 50s. (I’m talking about my experience as a contractor owning a ltd company).

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I won’t be investing the money for corp tax or VAT - that would be daft, just money set aside for dividends I might take in the next tax year, eg out of £60k in the account I might invest £20k. Profit after salaries and pensions from my consultancy activities is £100k so unless I really hit the jackpot I don’t see a £20k investment being higher than my companies profits. If I do I suppose an SPV would be the answer.

I wasn’t looking to invest in my name - I wanted to know if it would be possible in future to open a FT account in the name of my company. I already have a decent amount going in to my sipp and have no interest in increasing this (I intend on going out in a blaze of glory at 65).

I set up a Ratesetter (P2P) account in my company’s name and used some retained profits for a year long loan at 5.2%

The rates at the moment aren’t that good (risk Vs reward) so after the loan matured I withdrew the cash back to the business along with the pretty tidy return.

I’ll keep an eye on the rates and may do something similar in the future, but right now the P2P industry is looking a bit flakey for my liking.

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Yeah, I had some of my own cash in rate setter just to get the £100 bonus. I’ve withdrew most of my funds from my ablrate IFISA and have £1k or so left in moneything which is currently tied up in bad loans (although they’re supposed to be settled in the early part of this year). P2P had been a good little money earner for me, and even if I had lost the £1k left I would still be up a good amount over last few years. Like you I’ve decided that there are better investment opportunities now the likes of matched betting and P2P are drying up.

Would very much like to see this. Below is one of many asking for Corporate Accounts

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In addition to the risks of being classified as an investment co, I don’t think freetrade will accept money from a business bank account for kyc reasons.

(Also if you’re going to need the money in the next 3-12 months, investing it now adds a bunch of unnecessary risk for you?)

Freetrade have got back to me and confirmed that this will not be developed which is a shame. Good to get confirmation though, other companies wouldn’t have bothered replying or have no real idea if they would or not.

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I’d be looking for something similar @Jimbo747 let me know if find a good alternative please. I’ve tried DeGiro only and they have a pause on company accounts. From Ireland anyway. Haven’t really been shopping around but would like to explore a few options this year

Here’s one option

https://www.interactivebrokers.co.uk/en/index.php?f=41364

I haven’t fully read fees yet to compare with Hargreaves.

Can’t remember where I read it, but apparently x-o do as well although a quick look on their website didn’t mention it.

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I’ll check them out jimbo I know they’re bad for personal investors but if I have capital enough ( in an ltd.) to get the account fee-less in the future that’s a good shout. Sound