Sale of Assets and capital allowances - sole trader to ltd company
dantray
Registered Posts: 72 Regular contributor ⭐
Hello!
Forgive me if this obvious but my brain clocked off an hour ago!
A sole trader client has P&M with a collective NBV of around £750 which has been bought over the years and wants to transfer these to his newly incorporated company. No problem here.
In May 2011 he bought a Van for business use only and also wants to transfer this to the company.
My question is can the client claim capital allowances on the van through 2011/12 self assessment, before selling the van to the company at current market value, for the company to the claim capital allowances on this transaction also?
Or would this fall under a "connected persons" type clause and be disallowed?
If it is not allowed do I have the option of advising the client to put through either sole tradership or limited company, depending on the potential tax saving?
Thanks in advance
Dan
Forgive me if this obvious but my brain clocked off an hour ago!
A sole trader client has P&M with a collective NBV of around £750 which has been bought over the years and wants to transfer these to his newly incorporated company. No problem here.
In May 2011 he bought a Van for business use only and also wants to transfer this to the company.
My question is can the client claim capital allowances on the van through 2011/12 self assessment, before selling the van to the company at current market value, for the company to the claim capital allowances on this transaction also?
Or would this fall under a "connected persons" type clause and be disallowed?
If it is not allowed do I have the option of advising the client to put through either sole tradership or limited company, depending on the potential tax saving?
Thanks in advance
Dan
0
Comments
-
The client can claim through Sole Trader and then transfer to Limited at true market value, however if claiming AIA in sole trader then sale proceeds to Ltd will reduce amount claimable. You should also be aware that AIA is not allowable when director introduces assets to Ltd. All depends on who purchase invoice is to and what would be best for tax for client.0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 324 NEW! Qualifications 2022
- 160 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 94 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 273 VAT
- 92 Software
- 274 Tax
- 138 Bookkeeping
- 7.2K General accounting discussion
- 201 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership