Transferring Assets from a Sole Trader to Ltd

AndreaMc MAAT, AAT Licensed Accountant Posts: 21
HI All

I am after some advice. I have a client in the retail industry who was set up for her first year as a sole trader. After this first year she set the business up as a Limited Company. As she already had business bank accounts everything continued as normal really with this transition.

Luckily she did do a stock take on her purchases at this point the company moved to a limited company.

From a tax point of view I am aware there is an incorporation relief and I can transfer the stock and assets over at market rate by election. However, from the accounting side, what would the double entry be? I currently have added the Fixed assets, Stock items, opening bank balance, liabilities of credit cards (which have been used to pay for the stocks), and have put the double entry to a new DLA at the moment.

Any help on this would be greatly appreciated.


  • CSan89
    CSan89 MAAT Posts: 207
    I would just credit it to the DLA if they aren't taking any money for the stock.

    They will soon start taking money out for it not to matter in the long run anyway.
    AAT Level 2&3 - 2016
    AAT Level 4 - 2017
    Personal Tax, Business Tax and External Auditing

    ACA/CTA -
    Certificate Level - Jan 2019
  • AndreaMc
    AndreaMc MAAT, AAT Licensed Accountant Posts: 21
    Thank you for your response, greatly appreciated.
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