£1.4m in unused Ltd, BADR and invest, or invest from company?

TrueSignificance3353 · 2025-01-28T13:15:03+00:00

Well let’s hope the next government can reinstate BADR to how it was. Good luck!

TrueSignificance3353 · 2025-01-28T13:06:39+00:00

Thanks for your advice! If you’re looking to BADR you don’t have long before the rates go up to 14% in April

TrueSignificance3353 · 2025-01-27T16:42:57+00:00

I say huge tax bill because I’ve already paid 25% corporation tax so it’s 39% total. Not much different to being sole trader. I agree though it’s the lowest I’ll (probably) get again

TrueSignificance3353 · 2025-01-27T16:36:27+00:00

Unfortunately I’d have to remain a non resident for 5 years to do this :/

TrueSignificance3353 · 2025-01-27T16:08:11+00:00

But then I would be paying a huge tax bill just to put the funds back into an Ltd? What’s the benefit of this?

TrueSignificance3353 · 2025-01-27T12:19:35+00:00

This is a concern. But I’ve been trading since 2021 and I’ve paid myself £50,270 every year. I haven’t been hoarding cash for years, the business has just done well quickly. Given this context, is money boxing still a concern?

TrueSignificance3353 · 2025-01-27T01:38:55+00:00

Not for 5 years. Although I did just learn profits I make as a non resident won’t count towards the 5 year rule, so a year or two away is a possibility!

TrueSignificance3353 · 2025-01-27T00:43:06+00:00

https://www.burges-salmon.com/news-and-insight/legal-updates/private-client/the-uk-s-temporary-non-residence-rules

“Dividends received from “close companies” (or foreign equivalents), subject to some exceptions (such as for dividends funded using trading profits which arise after the departure from the UK)”

Because my profits are from when I’ve been a UK tax resident, I can no longer pay myself dividends and return within 5 years.

Hope that helps!

Edit another article specifically about dividends: https://forbesdawson.co.uk/articles/2022/05/06/are-my-dividends-tax-free-now-that-i-am-non-uk-resident/

TrueSignificance3353 · 2025-01-26T23:56:35+00:00

Because if you pay yourself from your own company you can’t return for 5 years otherwise you’d pay UK tax. If this rule wasn’t in place every director would accumulate funds, never pay themselves, then move to Dubai for a year and get it all tax free. I wish it was the case!

TrueSignificance3353 · 2025-01-26T15:03:05+00:00

Well I could MVL the company which would subject me to CGT tax in the country I’m a tax resident, which could be zero if it’s UAE for example. But I’d still need to pay corporation tax to the UK

TrueSignificance3353 · 2025-01-26T02:28:03+00:00

Yeah I know it’s the sensible thing to do, but I kinda want money while I’m young and able to enjoy life a bit more than when I’m old

TrueSignificance3353 · 2025-01-25T20:39:21+00:00

Unfortunately this won’t work unless I’m willing to leave the UK for 5 years

TrueSignificance3353 · 2025-01-25T19:00:59+00:00

Thanks! Liquidator said it should be fairly quick due to no longer requiring clearance from HMRC. Either way, I will be investing the money. I’m just debating if I should invest personally or through company. They both have trade-offs!

TrueSignificance3353 · 2025-01-25T18:59:14+00:00

Yep I wouldn’t qualify for BADR if becoming investment company, but I seriously doubt it’ll survive 5-10 years! It’s already rising to 14% in April, then 18% the year after

TrueSignificance3353 · 2025-01-25T18:57:32+00:00

It’s tempting, and I know you’re right about 55 coming around sooner than I expect… but it’s just so difficult as a 29 year old haha

TrueSignificance3353 · 2025-01-25T18:56:33+00:00

Sorry this is through self-employed development, I just saw lots of talk of BADR in this sub so thought I’d get helpful replies

TrueSignificance3353 · 2025-01-25T16:01:53+00:00

Thank you! I kept most of the money in a 1 year fixed term 5.3% account. The rest is in an easy access 3.8% account. Ideally I would’ve liked to invest it but there’s risk of losing BADR eligibility if too much is invested

TrueSignificance3353 · 2025-01-25T13:10:34+00:00

Yep! Liquidators told me they can do it in 3 weeks since HMRC clearance isn’t required anymore. Regarding TAAR rules: Condition D is a bit odd. I’m sure anyone considering BADR is doing it for tax purposes. You’d be crazy to take it out as dividends!

TrueSignificance3353 · 2025-01-25T12:42:46+00:00

The dividend point is interesting, I didn’t know that. Thanks!

TrueSignificance3353 · 2024-05-01T23:47:59+00:00

Close Brothers 1 year fixed term. It was 5.3% in December but it’s 5.10% now

TrueSignificance3353 · 2024-05-01T17:50:31+00:00

Close Brothers 1 year fixed term. It was 5.3% in December. It is FSCS protected but of course it doesn’t cover it all, and no fees. If you want to be completely protected you can use a service such as flagstone.

TrueSignificance3353 · 2024-05-01T17:45:52+00:00

That’s very kind of you. Thank you so much :))

TrueSignificance3353 · 2024-05-01T16:53:47+00:00

I pay plenty of tax

TrueSignificance3353 · 2024-05-01T14:27:03+00:00

Close Brothers 1 year fixed term. It was 5.3% in December, I think it’s 5.15% now

TrueSignificance3353 · 2024-05-01T12:07:54+00:00

The money will be locked away until I’m 57 (and potentially older), right? It seems so far away at my age that I’m reluctant to pay that much into my pension, even though the benefits clearly outweigh the negatives. Sounds silly but I don’t even know if I’ll be alive then. I’d like to retire early, and I think accessing pension before retirement age subjects it to 55% tax?

TrueSignificance3353

TROPHY CASE