Invest Limited company surplus cash into ******

[trying_to_survive]

Hello all,

I was wondering what you think about this and if you have done anything similar...

Can I invest surplus cash from my company (it's a IT company) account for buying ******? So let's say if I bought 10K in coins and kept the investment for 5 years (in company's name) and assume it matures to 100K in 5 years...what are the tax implications and other factors to think of? Can I offset 10K in corporation tax for the year invested and what are the tax liabilities for the return in the future....90K? The figures are just illustrative for my ease of explaining things!

I know ****** is risky and good chance of losing the investment...

 

[Scalloway]

Putting money into ****** is acquistion of an asset so it does not affect the company's tax position. The company would pay tax if it made a profit on disposal.

 

[The Byre]

The company does not pay corporation tax if it buys gold UK coins made by The Royal Mint and they go up in nominal value.

However, speculative deals are probably not a core activity of your company and therefore not an allowable expense. Cryptos are not currencies and therefore cannot be entered into the books as such. You will have spent money on something that is not a business activity and will be regarded as a private withdrawal of funds.

As for my opinion on cryptos, try this thread here - https://www.ukbusinessforums.co.uk/...es-turning-out-to-be-rat-poison-again.420968/

 

[nelioneil]

Companies also do not have a capital gains allowance (unlike with individuals) - so any profit is technically taxable. Be careful if you want to go down this route.

 

[m4hmo]

I like ******. Was late to start in early 2021 but made some nice profit (£6k turned to £27k). Then started buying all of last year as things crashed but especially between November and 1st week January when everyone needs Xmas/new years money. I got mostly cro coin because I like the potential upside. Prices were low then. Had a little recovery this month, but don't be surprised if it pulls back down a good 30%. Average yourself in, buy some, wait, buy more if it drops. Or just but and wait till the 2025 bull run. Not financial advice. You can lose it all when it's not one of the old coins.

 

[Mark T Jones]

As a broad rule, you should be speculating with your own money, not company money.

Although you should probably be seeking dedicated & specific tax advice on how you should be treating this.

 

[HFE Signs]

I'd be very reluctant to invest in ******, I'm no expert on this but simply looking at the performance graphs I'd stay well away.

 

[WaveJumper]

Interesting "problem" to have, its come up several times before on the forum a company claims to have surplus cash and looking to put it into a speculative market. Do companies really have 'surplus' cash for this time of investment or should the business plan be to look at securing the companies long term future in a more "secure fashion". This is no criticism of the OP just a general thought that I put out there.

Personally I would think this should be a personal investment rather than a company one but DYOR

 

[Nico Albrecht]

If you wanna invest do it as a person not as a business. Very few accountants can make sense out of the HMRC guidance.

The usual capital gains is relative straight forward but if you get ****** and you start Staking it with let's say weekly or monthly payouts it gets messy how to even declare that, throw in trading losses and it is very complicated to even figure what what you owe HMRC.


Good starting point here: https://koinly.io/blog/uk-defi-tax-loans-mining-staking/

As for ****** looking at different EU countries can get you advantages such as Germany and Portugal were it can be tax free if not moved, traded or converted to another token.

The tax would only be applicable to ****** owned for less than a year. Gains from ****** held for longer than this period of time (365 days) would still be exempt.

 

[SillyBill]

No axe to grind but I think "gambling" is more of an appropiate term vs "investing" for ******. Noone invests in other conventional currencies, "trading" is the term used there which is appropiate as simply changing a means of exchange. I used to do a lot of gambling in penny stocks years ago, both made and lost tens of £k in the process in single transactions, it was never investing though, and neither is ****** IMV. Some right bandits in the AIM market and even bigger ones in ******, I suspect we're going to see a lot more arrests and implosions over the coming cycle. Pump and dump as was my strategy years ago and it seems like it ought to be the same thing now in ******... except in this arena you've got too many people who think they're Warren Buffets and actually believe the hype; brought a load of people in who have poor financial literacy IMO (coupled with effectively zero market oversight), easy to see where the problems are coming from, many of whom never traded a share in their lives before putting their live savings in.

 

[m4hmo]

Be greedy when others are fearful - will return to this post in 2025. If you have any interest in ****** at all you should be buying/have bought by now. Especially in the last 3 months.

 

[Mark T Jones]

Be greedy when others are fearful - will return to this post in 2025. If you have any interest in ****** at all you should be buying/have bought by now. Especially in the last 3 months.

The key question here isn’t whether ****** is a sound investment (that's just guesswork), but whether speculation should be done with company or personal funds

 

[m4hmo]

The key question here isn’t whether ****** is a sound investment (that's just guesswork), but whether speculation should be done with company or personal funds

Stocks shares ****** its all gambling, only put it what you're willing to lose. Simples. Whether its company or personal does that matter? Less tax with ltd company...

 

[Mark T Jones]

Stocks shares ****** its all gambling, only put it what you're willing to lose. Simples. Whether its company or personal does that matter? Less tax with ltd company...

Not on gains there isn't, which is why the OP need professional advice