TL;DR: An InvestEngine Business Account is a General Investment Account (GIA) held in the name of a UK limited company, LLP or partnership. It is not a bank account, a savings account or a tax-sheltered wrapper like an ISA or SIPP. Interest and dividends earned in the account form part of the company’s taxable income, and realised capital gains are typically subject to Corporation Tax. Companies do not get an annual Capital Gains Tax allowance, but realised investment losses can be offset against gains.
If you’ve invested as an individual before, you’re probably used to tax wrappers like ISAs and SIPPs. A Business Account works a bit differently, so it’s worth being clear on what kind of account it actually is, what it isn’t, and how the tax side fits together.
A Business Account is a General Investment Account (GIA)
In structure, a Business Account is a General Investment Account (GIA) held in the name of your company. It’s an investment account; it’s not a bank account, not a savings account, and not a tax-sheltered wrapper.
That means:
- The account is owned by your limited company, LLP or partnership, not you personally
- Money in the account is invested in things like ETFs; it’s not held as cash earning a set interest rate
- It sits on your business balance sheet as a company asset, alongside things like cash, equipment and receivables.
- There’s no annual contribution limit and no “eligible money” rules – your company can invest as much of its own surplus cash as it wants to.
What a Business Account is not
It helps to be clear on this:
- Not a bank account. You don’t pay suppliers or staff from it; it’s for investing, not transactions.
- Not a savings account. It doesn’t pay a guaranteed interest rate; returns come from investment performance, and the value of your investments can go down as well as up.
- Not an ISA, SIPP or tax wrapper. There’s no equivalent of the ISA or SIPP for a limited company. A GIA is the standard structure for business investing in the UK.
What that means for tax
Because a GIA isn’t a tax-sheltered wrapper, returns generated in the account are part of your business’s normal financial activity and feed into its tax position.
We’ll get into the specifics of the tax treatment of business investing in another article, but put simply:
Income (interest and dividends)
Interest and dividends are received by the company and form part of its taxable profits, which are subject to Corporation Tax.
A quirk to know about: most ETFs available in the UK are domiciled (legally based) in Ireland or Luxembourg. This means the income they pay out is typically categorised as “overseas dividends” or “overseas interest”, even when the ETF holds UK shares or UK gilts. Your accountant will handle the categorisation in your accounts.
Capital gains
When you sell an ETF for more than you paid for it, the company has made a chargeable gain. For limited companies, those gains are typically taxed under Corporation Tax (not personal Capital Gains Tax).
A few things worth knowing:
- Companies don’t have an annual CGT allowance like individuals do. Every realised gain is generally part of the company’s taxable result.
- Losses can offset gains. Realised investment losses can be used against other gains to reduce the company’s tax bill.
- Unrealised gains aren’t taxed. You only have a chargeable event when you actually sell.
Reports we provide at year end
At the end of the tax year, InvestEngine provides two key reports to make this straightforward:
- A Consolidated Tax Certificate (CTC) showing the interest and dividend income your portfolio has earned.
- A Capital Gains Tax report showing realised gains and losses on the ETFs in your portfolio.
Both cover the 12 months to 5 April and slot neatly into your company’s tax return. You can also generate custom reports and statements from your account at any point during the year if your accountant needs interim numbers.
How accountants tend to handle it on the books
Most accountants treat the account much like another company bank account in the bookkeeping system:
- The account is shown as a balance sheet asset
- Transfers in and out are accounted for like movements between bank accounts
- Dividends and interest received flow through the profit & loss account as income
- Realised gains and losses are reported at the point of sale and feed into the Corporation Tax calculation
It’s relatively standard accounting, but it does mean the account is visible in your year-end accounts, not just an off-ledger thing.
Other things worth knowing
- Director loans: if a director wants to lend personal money into the company so it can be invested, that’s usually allowed (subject to the shareholders’ agreement) and shows up as a liability the company owes back to you. As ever, document it and check with your accountant.
- Withdrawals: you can withdraw at any time. Money is paid back to the company’s nominated bank account, typically within a few business days of selling. There are no exit fees.
- Eligibility: Business Accounts are designed for UK limited companies, LLPs and partnerships. Other structures (e.g. sole traders) generally use personal accounts instead.
A note on tax advice
Tax treatment depends on your company’s individual circumstances and the rules can change over time.
We can give general information, and our reports make the numbers easy to find, but for anything specific to your business, speak to your accountant or a qualified tax adviser. InvestEngine is not authorised to give tax advice.
In summary
A Business Account is a GIA in your company’s name: a straightforward investment account that puts surplus cash to work, sits on the balance sheet, and feeds into your Corporation Tax in a predictable way.
It’s not a bank account or an ISA, and it doesn’t pretend to be. It’s a simple, transparent way for a UK business to invest.
Important information
Capital at risk. The value of your portfolio with InvestEngine can go down as well as up and you may get back less than you invest. ETF costs also apply.
Tax treatment depends on personal and company circumstances and is subject to change.
This communication is provided for general information only and should not be construed as advice.