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Corporate investments

smithsmith Member
in Technical stuff

Hi all,

Looking at an investment for a company £200k ish. They are not a micro entity, so should fall under FRS 102. Portfolio will be equity heavy.

Trying to decide on whether Onshore bond or GIA is best. Most things I read say the latter. But... If the underlying investments are taxed in the same way whether in a bond or not, i.e. dividends are tax free & gains pay CT, does the tax credit on the bond make this more favourable, as the bond won't have suffered tax in it's lifetime? (so essentially you are getting a credit for something that hasn't been paid?)

I may be over simplifying this... And may have overlooked something!

Thanks in advance

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Comments

  • mooshamoosha Member

    Hi,

    So, you have a fair value accounting company. The bond credit (tax treated as paid) can't be bought into account until actual disposal (part/full) of the bond. So on a yearly basis the company would just show a gain (credit) or loss (debit) based on the net bond value.

    We have a guide which compares the investment choices here that might be useful: https://www.quilter.com/494fe2/siteassets/documents/platform/guides-and-brochures/guide-to-corporate-investments.pdf

    Regards

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  • les_cameronles_cameron Member
    edited July 14

    I have yet to find a plausible reason why you would get a bond wrapper of any description in the way when the investment available can be held directly. And if you do find an investment that companies tend to like, such as low volatility smoothed funds :-), that is only available in a bond then an onshore bond isn't the best idea for fair value companies. I'm assuming Quilter guide reflects that so won't link to ours here.

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