1) Property is a firm favourite for entrepreneurs. Distressed purchases are a great starting point. We recently sourced a prestigious golf complex with properties for sale on the Portuguese Algarve, for example, which offer great letting potential. They were bought off-plan but the potential purchasers were unable to complete on the purchase, so they lost their deposits. We’ve negotiated the ability to buy these villas from the developer with a large discount (taking into account the fact that the deposit has already been paid by the initial investor). The net result is a discount of over 18 per cent off the list price, with growth potential and a guaranteed income from the lettings.
2) Off-shore investment bonds are a great investment tool for the high rate tax-paying entrepreneur because there are no limits to the amount that can be invested. And, with the very generous tax treatment of off-shore bonds, the investor can take a five per cent per annum tax deferred withdrawal.
3) Enter the Dragons’ Den: Have you considered investing your money in a new business” This sounds like a speculative venture but, by using your skills, getting involved with the right people, looking at the business as a whole and assessing its chances of success, you – and the new business – can make a healthy profit.
4) Use your Small Self Administered Pension plans opportunities: This sounds like an obvious move, but it’s one that is all too often overlooked. The SSAS market is a great opportunity to take a sum of money and get the Inland Revenue to make a donation of 20 per cent. You can then invest it in a commercial venture, which can grow tax free until your normal retirement date. This is easy money where, at retirement, you can take 25 per cent of your fund back as tax-free cash. The balance can then provide you with an income for the rest of your life.
5) Get the best advice possible. Be careful to choose a wealth manager/IFA that is a specialist in the investment markets. Look to build up a long-term relationship with them – they should be a good sounding board for your ideas and should also have terrific contacts with accountants, solicitors and investment houses to keep you totally up to speed on the best money-making opportunities that are available.
Frank Cochran is owner of FSC Investment Services.