Issuing Corporate Bonds

ac-invest

Registered User
Messages
11
Hi all. I'm looking to issue corporate bonds at 5% to family and friends can anyone explain how this would work and the tax implications? I invest in syndicated real estate deals and I want to max out my investments and offer the 5% to people. Ideally I'd like to be able to allow then claim some on capital gains allowance if there's some way I could do this with shares etc please chime in. Thanks
 

Palerider

Frequent Poster
Messages
1,431
Not sure what you are trying to achieve, are you looking for investors for your business and offering a premium of 5% pa ?, if so you could divide your shareholding proportionately or provide no security.

There is no way to avoid capital gains tax, if a gain is made or lost it needs reporting.
 

ac-invest

Registered User
Messages
11
Yeah looking for investment in a ltd company I have. Capital gains allowance is €1270 wondering if I can issue a corporate bond that the investor might be able to include this in their allowance thus tax-free to a certain extent.

I'm talking about shares above I'm clearly talking about corporate
 

dublin67

Frequent Poster
Messages
247
There is potentially a minefield of anti-avoidance legislation that seeks to prevent prevent profit extraction from companies being taxed as a capital gain. A lot of the legislation seeks to tax such payments as dividends with a potential marginal tax rate of 55% (and not the 33% you are looking for). You'd need to pretty serious tax advice to make this work.
 

EmmDee

Registered User
Messages
222
Yeah looking for investment in a ltd company I have. Capital gains allowance is €1270 wondering if I can issue a corporate bond that the investor might be able to include this in their allowance thus tax-free to a certain extent.

I'm talking about shares above I'm clearly talking about corporate
If it's a bond issues at par and paying 5% - eventually redeeming at par. There is no capital gain only income flow (the 5%).

If you plan to issue bonds to "donate to people" then you have gift tax liability.

If you want to issue income paying equity to allow for capital gains you could issues shares and pay a dividend of 5%, or some form of preference shares or convertibles.

But remember, the capital gain is on liquidation - so periodic payments (unless they are capital repayments) will be income not capital gain

You need legal advice
 
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