The Benefits of Investing Through Your Own Limited Company

Описание: UK taxes have become increasingly hostile to investors. Whether you’re building a share portfolio, investing in property, or simply looking to make the most of your savings, the government has created an environment where tax-efficient growth is harder than ever.

Dividend tax is one of the biggest culprits. The dividend allowance has been slashed to just £500 per year, meaning that any dividend income above this is taxed at punitive rates of up to 39.35% for additional rate taxpayers.
Capital Gains Tax is now payable on even modest profits, with the annual exemption reduced to a mere £3,000.

Meanwhile, property investors have seen the tax treatment of mortgage interest severely restricted. You can no longer deduct all of your finance costs from your rental income, which results in a higher tax bill even if your profits haven’t increased.

At the same time, the available “shelters” from tax — pensions and ISAs — have their own limits. You can only invest up to £20,000 per year into an ISA, and while pensions are incredibly tax-efficient, the annual allowance is capped at £60,000 (and often less for high earners), with restrictions on access until age 55 or later. In short, if you’re a higher-rate taxpayer and have already used your tax wrappers, you’re quickly left with very few options.

But there is an alternative that more investors are waking up to: using a limited company to invest.

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