Transfer asset from Ltd co. to self

B

Bmd1

Guest
First post guys,

can someone kindly confirm if my understanding on my situation is correct:

My limited company successfully traded for a number of years but due to an issue beyond my control recently ceased to trade. The company has substantial reserves so even though it is not trading it will continue to pay me a salary for some time to come. There is a company van that I wish to transfer to my personal name. It was purchased four years ago and the VAT was reclaimed at that point. My understanding is that I can transfer it to my personal name at current market value, the company will have to pay the PAYE on the value of the transfer as it will be deemed to be effectively part of my salary along with the VAT element at 23%...? I also plan to de-register the company for VAT shortly.
I cannot find any clear Revenue guidance on the issue...

Thanks for any help
 
Hi Bmd

You should get tax advice on your overall strategy.

If the company has substantial reserves, it may be better to liquidate it and you will pay 30% CGT on the reserves. If you are doing this, do it before the budget which might increase the CGT rate. Do you have any unused CGT losses or unrealised CGT losses?

If you have no income, paying yourself a salary is better as you will be able to get some of it tax free and some more of it at 20%. But if you are paying the marginal tax rate of 51% (income tax, prsi and USC) then you would be far better liquidating it.

There might be some advantage in paying yourself salary up to the top of the 20% rate, and then liquidating it.

I can't advise you on the VAT issue.

If the company transfers a van to you worth say €4,900, the €4,900 will be treated as net pay. The company will be deemed to have paid you €10,000 less 51% charges to result in the net value of €4,900. The company will have to pay €5,100 in taxes etc to the revenue.

Brendan
 
Thanks for the reply Brendan,.

I think the cheapest option and less hassle will be to run the reserves down through salary and then opt for voluntary strike off as opposed to employing the services of a liquidator. The salary I will need to draw will be quite low with a bit PRSI & USC to pay.

I will look at the possibility of de registering for VAT asap and then transferring the van post de registration.

I will try and get clarification directly from revenue i think.
 
Bmd1

It would be worth yor while speaking to a tax advisor -- there may be other options .. Pension for one maybe
 
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