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Using the company to buy shares

Discussion in 'General Investing Discussion' started by timmeh, 7th Jan, 2011.

  1. timmeh

    timmeh New Member

    7th Jan, 2011
    I have a company structure in place - originally set up for my music business/studio (money pit) for liability concerns on advice from my lawyer wife (not a finance lawyer!). It's been running at a loss for the last couple of years due to quite high outlays and as I'm juggling that with raising kids so it's not been a full time focus. Now we are keen to use the company to buy shares and utilise that current loss for tax purposes (if that would be advantage to do so?). Haven't yet gone to the accountant yet, that's next week, but would be keen to hear any opinions, suggestions on what we can do/how we should best go about it?

    Thanks in advance.
  2. Nigel Ward

    Nigel Ward Team InvestEd

    10th Jun, 2005
    How do you get the money out of your company? only by dividend.

    Better not to buy appreciating assets in a company structure. Set up a trust with a company as trustee or buy in your own name/s. Use yourself if you're the lower income earner.

    ps. Get your own financial and tax advice. It's Friday arvo and I need a drink... :D

  3. Waimate01

    Waimate01 Well-Known Member

    26th May, 2008
    I use a company as a family cashbox, and can confirm there's an ongoing question of how best to get money out. However, it's a good way to limit your tax to 30% but largely only applicable to relatively high income levels, as the cross-over point where your individual average tax rate exceeds 30% is set quite high these days. If you plan to let your gains and assets compound, and you're above the 30% average individual rate, then it's a good place to do so.