After 2008 global trackers performed better than global dividend funds. But if we look at the entire period 1994-2023, the dividend fund came out ahead.

The comparison takes into account the corporation tax for limited companies. I wrote a post on global tracker Vs dividend fund for limited companies here: https://www.foxymonkey.com/dividend-fund-limited-company/

This is super interesting. What are your thoughts on a global stock fund vs global dividend fund? Which one would be better if you have an investment period of say 5-10 years?

Hi John, in my experience accountants want to do the bare minimum. A few accountants understand more complex concepts such as company investing but you need to find them and they still won’t have all the answers (brokers, bank accounts, professional contacts for buy-to-let etc.).

Happy to recommend one. I’ve sent you an email.

Risk of your company classified as a “Close Investment Holding Company”
Legal separation between trading and investing
Easier for tax purposes

Don’t suppose you could recommend an accountant ?

It’s true, the rules for Entrepreneur’s relief keep changing. Even the name. It’s now called Business asset disposal relief. Who knows if it will be here a few years from now?

I have not claimed it, but I know people in the community who have done it.

Fixed deposits must be offering higher rates these days compared to last year. Not sure they’ll beat inflation, but at least you know what you’re getting :)

Thanks for the reply Michael.

Yes I suppose there is a lot of grey area for entrepreneurs relief (even if it will stay around). The thing that confuses me is the total assets for non trading operations description (I am an IT contractor so the only assets I have a cash pretty much but I would need to invest 50-70% of the spare cash to get any decent returns). Also the program might disappear in the future, do you have any experience applying for it?

I think for the moment I might just try and look at some fixed term deposits (1-2 year ones) as now it seems like a good time with interest rates going up and volatility in the stock market, but keen to here your thoughts.

Hi Connor, trading companies can hold investments, yes. Most companies have some form of non-trading activity anyway (bank interest for instance).

But it might cause problems with your trading status if you do it in a big way. Losing Entrepreneur’s relief, business property relief and having more assets at risk of litigation. This might or might not be ok with you.

So yeah, it might be perfectly fine as long as you understand the risks and as long as it works for your company and your partners.

Quick question, if we don’t make another investment company and just invest the money in our existing company and the returns are still far lower than our trading revenue (i.e safe low yield investments), would that be okay?

Hi Alan, yeah Starling rejects holding companies, even for existing clients.
Other challenger banks might work.

The business banking question is one of the most frequently discussed ones in the course community. Frankly it’s a pain. Each bank has its own characteristics (SIC codes they serve, speed, what to say, FSCS protection etc). We have built some collective wisdom and you are more than welcome to join us by taking the course. It will launch again soon, including lifetime access to the community.

Thanks for posting this!

Do you have any advice for info to provide while setting up a bank account for the holding company? Starling declined my application and I want to be careful before reapplying / trying someone else but feel a bit like I’m stabbing in the dark here.