Companies can find themselves in a position where they have relatively large sums of money held in company bank accounts. Reductions to corporation tax rates make the ability to defer tax more attractive and may encourage more company directors to retain profits in their companies, given the widening gap between corporation tax rates and personal tax rates.
Companies need to keep enough cash in readily accessible accounts to meet day to day running of their businesses. However, funds considered to be surplus to these requirements may be considered for investment, primarily to achieve a better return than their business bank account provides.
Important considerations when selecting an appropriate investment for corporate funds will include access, capital security, risk and the timeframe for the investment. Investment vehicles can include deposit accounts, onshore investment bonds, offshore investment bonds, and unit trust funds, each with different treatment for tax purposes. Please contact us if you would like to discuss the options available to you.
Past performance is not a reliable indicator of future returns. You should be aware that the value of an investment can fall as well as rise and that investors may not get back the amount they invested.
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'The Financial Ombudsman Service (FOS) is an agency for arbitrating on unresolved complaints between regulated firms and their clients. Full details of the FOS can be found on its website at www.financial-ombudsman.org.uk .'
PFM Associates is registered in England and Wales, company registration number 03871403.
The guidance and/or advice contained in this website is subject to the UK regulatory regime and is therefore restricted to consumers based in the UK.
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