Nick Wright explains why business owners should be cautious about holding investment property in a trading company and explores more suitable structures for investing excess profits, balancing tax efficiency, asset protection and long-term succession planning.
When a profitable trading company starts to accumulate surplus cash, investing in property can appear attractive. However, buying investment property directly within the trading company is not usually advisable.
First, there is asset protection. Trading companies are exposed to commercial risks, including claims from customers, suppliers and lenders. Holding valuable investment property on the same
