Cash rich Ltd company - ideas

[W4NTED]

A LTD company has cash reserves of crica £500k sitting there. Obviously taking this out costs tax so what does the PH members do with such money?

Apart from investing in property what else can one do with such cash reserves? The business is service based so no stock to buy or reinvest.

[Eric Mc]

Max your pension contributions?

[m30dus]

As Eric says, pension contributions would be tax efficient depending what arrangements you have in place for those at the moment, if any.

Alternatively maybe inter-company loan to another LTD to trade in something else taking your interest.

Ardmore Savings and many others like them also offering increasingly better savings options and bonds for deposits now that the base rate is working its way back up. Likely to beat whatever your principal bankers are able to offer you.

[StevieBee]

A) Pension

B) Fund a new start up

C) Employ someone who can make you another £500k

D) Invest in a local community project / charity

E) Take it out, pay the tax and enjoy the remainder.

F) A bit of all of the above

[nickfrog]

Eric Mc said:

Max your pension contributions?

That was my first thought but obviously it depends how old the OP is. If near 55 then yes.

[Chipper]

The problem is it’s just sat in a business account devaluing due to inflation. I am in a similar position but have decided to go down the route of a corporate investment.

[anonymous-user]

Is there any way to reinvest the money back into the business?

[jonah35]

Pension
Buy a property for the business
Electric car
Invest in the business
Lend to another company

[lizardbrain]

What sector?

Buy out a competitor.
One-off marketing campaign.
Hire someone to do the recurring task you dislike the most
Cheap bridging loan for personal purchase.
Gamble on bitcoin
Move to a low tax country
Big employee pay rise

[Chipper]

Mr Spoon said:

Is there any way to reinvest the money back into the business?

I’ve maxed out pensions , we have EV’s bought through the business in full and yes I could keep trying to expand but it means more staff and stress which brings more problems and then what do I do with the money??

Yes you can take the money out of the business but if you have pretty much everything that you want you will be hit with a massive tax bill.

The only way I feel is going down the corporate investment route. I will have a 3% charge putting the funds in and then an annual charge of 1.7% . You can access the money if needed within I think 10 days and no charges taking it back out.

I understand charges seem high but I’m losing a substantial amount with it just sitting in the bank now with inflation and I can’t see any other options.?

The markets are down though I personally feel we might see another big drop at the end of the year. I’m not putting everything in but a relatively large lump drip fed followed by a monthly contribution which I’m under the belief needs to be set up.

Edited by Chipper on Thursday 21st July 06:43

[Smurfsarepeopletoo]

Give your staff a payrise? you may get a good return through increased productivity.

[Mr Overheads]

Wisealpha allows you to open a corporate account. Drip feed say 5k a week, into over as many different corporate bonds aas you can nd compound interest will cover the risk of any single bond going tits up. Obviously avoid any bonds where you know the sector or individual company isn't in a good place.

[anonymous-user]

Smurfsarepeopletoo said:

Give your staff a payrise? you may get a good return through increased productivity.

Sounds great, but if you have never been on the givers end, you will quickly realise its not money that increases productivity, its value.

[anonymous-user]

Chipper said:

Mr Spoon said:

Is there any way to reinvest the money back into the business?

I’ve maxed out pensions , we have EV’s bought through the business in full and yes I could keep trying to expand but it means more staff and stress which brings more problems and then what do I do with the money??

Yes you can take the money out of the business but if you have pretty much everything that you want you will be hit with a massive tax bill.

The only way I feel is going down the corporate investment route. I will have a 3% charge putting the funds in and then an annual charge of 1.7% . You can access the money if needed within I think 10 days and no charges taking it back out.

I understand charges seem high but I’m losing a substantial amount with it just sitting in the bank now with inflation and I can’t see any other options.?

The markets are down though I personally feel we might see another big drop at the end of the year. I’m not putting everything in but a relatively large lump drip fed followed by a monthly contribution which I’m under the belief needs to be set up.

Edited by Chipper on Thursday 21st July 06:43

Roger, so have you considered buying another business? Starting a new one?

There are many ways to get money out of your company. I would seek advice if you do not know what these are.

[DevonPaul]

Sponsor a motor racing team? (or if you like bikes, I gather a the OMG BSB team might be glad of the cash).

[lizardbrain]

I didn’t hear it first hand, but I read rishi said this eve that one of his tax plans is to find a way incentivise companies to spend their spare cash in a way that might grow the economy productively.

Will be interesting to learn what this means as it is clearly an ‘issue’ many have.

[AB]

Voluntary Liquidation. It's what I'm doing.

[Alpinestars]

AB said:

Voluntary Liquidation. It's what I'm doing.

Doesn’t work if OP wants to carry on doing what the company currently does.

[AB]

True

[NorthDave]

I'd go the company transfer and then investing route. You could end up with a decent best egg which you could then draw an income from in later life to supplement the pension?