Self-Employed to Limited Asset Transfer

[Lambda]

I am about to form a limited Company. I am self-Employed for 5 years and I have a good few assets, for which I claim capital allowance.
Can anybody explained me how to transfer these assets to the new company book, does the new company need to "buy" them of me?
thanks

 

[Graham_07]

There are a number of issues here :-

1) What are the current tax written down values of the assets
2) What are the net book values of the asset
3) What values were you planning on transferring at
If TWDV is less than NBV/transfer value then a Balancing Charge may arise on your sole-trader business.

4) Has VAT been claimed on the original purchase of the assets
If VAT has been claimed on the purchase then VAT would be payable on the disposal. ( The company would have a VAT claim on the other side to the same amount of course)

5) Is it a good idea to have them in the company
If the company ceased through insolvency, the assets may be lost in a liquidation

6) How was the company going to pay for them
- via share capital
- via directors loan

If the assets have a material value then the advice of a professional accountant would be worthwhile to determine the best course of action.

 

[Joe_90]

Not disagreeing with your points could you clarify

There are a number of issues here .

1) What are the current tax written down values of the assets
2) What are the net book values of the asset
3) What values were you planning on transferring at
If TWDV is less than NBV/transfer value then a Balancing Charge may arise on your sole-trader business.

Is there relief from this balancing charge where both parties elect to transfer at tax written down value.

4) Has VAT been claimed on the original purchase of the assets
If VAT has been claimed on the purchase then VAT would be payable on the disposal. ( The company would have a VAT claim on the other side to the same amount of course)

Does the transfer of machinery as part of the sale of a business qualify as an exempt trransaction under S3 (5) b iii

Don't forget to look at Goodwill. It is subject to CGT but may qualify for retirement relief. It is also better than pay 51% in future years.