Thank you, Michael as always. This is really interesting and I will definitely run it past my tax advisor and accountant. My confusion was due to my wrong recollection from your blog from last year (Investing Ltd company profits) that corp tax is payable on all gains regardless whether these are realised or not, however I went back and re-read that part. Your answer here is same as it was in the blog and I stand corrected, Thank you. In practice, it means even less of impact if we invest via a dedicated Investment Company and only bonds and REITs part of the portfolio will be taxed while funds or individual stock will remain as they are until such time that we realise these gains, which may be some years away in most cases and will only be applicable to part of the portfolio we realise in a tax year, right?

Thanks, Bashir for your kind words. I am talking about investments like stocks or funds that have unrealised gains. These are not taxed annually, but only when realised. There are other types of investments, that typically produce taxable income every year, like bonds or property. These are taxed the year they are received.

Hope that clears things up a bit. Also, investment companies can pay a salary and a pension. It just has to be an appropriate income for the services the director (or employee) provided. So in other words, ‘wholly and exclusively for business purposes’ as they like to say.