Assets bought personally now in use in Ltd Company

Gillian
Gillian Registered Posts: 17 Dedicated contributor ? ? ?
Hi

I have a client who has bought items personally before incorporation and in fact had them for a while before incorporation.
Was not self employed before.

They are now using these items totally in the business
Computer
Gas testing equipement
Various plumbing equipment.

They would like to sell these items to the Limited Company from the director and become assets in the business.
What value would these be put into the business, and for some items they dont have the orginal receipt.
At some point they would need to be replaced.

Comments

  • Gillian
    Gillian Registered Posts: 17 Dedicated contributor ? ? ?
    Bump

    am really interested in anyones thoughts on this.

    I have had situations were equipment has been bought and then use in sole trader so we have moved it into the Limited company and so on but not sure about this one...

    my thought are I think that’s its fairly straightforward, and HMRC would accept a fair valuation based on how much equipment of an equivalent specification and age are being sold secondhand. A simple search on eBay will do for most equipment.
    and off course assuming no personal use of the assets
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    This is standard incorporation stuff.

    If he claimed the cost as a self employed person, he will have to consider CGT on the sale of these to the company.

    He can transfer at current market value into the company (yes, look on ebay is a good idea). Cr his DLA.

    I'm pretty sure capital allowances will need to follow on from the TWDV of the sole trader because it's from a connected party.
  • Gillian
    Gillian Registered Posts: 17 Dedicated contributor ? ? ?
    Hi Monsoon

    thanks for that
    but thats just it it is not incorporation from self employed, they had the assets personally, and now using totally and exclusively in the business
    bought before business was incorporated for personal use
  • stevo5678
    stevo5678 Registered Posts: 325
    Hi Gillian,

    As Monsoon said just bring it in at the Market Value. Dr Assets Cr DLA.

    Thanks
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    Sorry, I missed the bit where you said they weren't s/emp before. Whoops!

    Yep, like Steve says, MV is just fine :)
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