With deposit interest rates being at virtually 0% and at an all-time historic low, companies with cash holdings that are not needed in the immediate future could profit from investing in specially managed funds that hold low risk, but can provide attractive returns. Also, depending upon the Company structure it can be possible to delay taxation on the annual return until a time in the future that may be more tax efficient i.e. when perhaps a loss on ordinary activities occurs.
An existing client of ours was able to re-direct £220,000 between March 2015 to date ( August 2016) from his company cash holdings into his personal pension plan without him incurring a tax liability and in fact his company was also able to claim a tax break on the transfer. Depending upon your circumstances it may be possible to achieve a similar outcome.
Quote from this client’s letter to us: “The advice on investing company profits into tax efficient personal pension funds was particularly valuable”.