Buying a partner's asset

jennywilson

A partner is introducing his second hand car into the company.

It was bought 2 years ago for £75,000, a deposit of £10,000 was paid.

The car is now worth £31,000 but the finance outstanding is £34,000.

The partner paid the deposit and the monthly payment for the last two years.

The partner concerned would like the deposit paid back to him which I assume would be shown as other income so is subject to tax and ni.

When introducing a second hand asset is a written valuation required and if this is lower than the outstanding finance what are the entries in the accounts?

Anne Boleyn

Car purchase

Hi Jenny

Could you just clarify whether this is a director bringing his car into the company or a partner bringing his car into a partnership.