Q. Can I buy shares with my limited company money as an investment and hold them against business assets?
A. Your company can invest its money in acquiring shares and, depending on the level of such an investment, may assist in any IR35 argument, ie that the company is a genuine business with diverse income streams, risking its capital.
One thing to bear in mind is Entrepreneurs Relief, should you wish to claim this following future closure of your company, if indeed this is applicable. Upon disposal of your shares on a winding up of your company you could apply for the final monies you extract from the company, ie what is left in the company, to be subjected to capital gains tax (CGT) rather than being treated as a dividend. Where CGT applies this can be significantly reduced by claiming Entrepreneurs Relief, which will ensure that any net gain is taxed at 10%. However, to qualify for this relief your company must be a trading company 12 months prior to the date of disposal of the shares. If the value of non-trading assets is greater than 20% of its total assets then this could point towards it being a non-trading company.
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