Incorporation Relief
AMS_Accountants
Registered Posts: 31
Hi
I have been asked a question about this and I have never had a client who started a business as a sole trader and then converted to a limited company.
The person wants to sell his assets to the limited company for shares and cash. As stated, he is a sole trader but wants his wife to be a 50% shareholder in the limited company. As CGT allowance for 2016/17 is £11,100, he wants to use his wife's allowance as well to sell to the limited company for £22,200 in cash and the rest in shares.
Am I right in thinking that he cannot use his wife's allowance because he owns the assets? He operates as a sole trader and not in partnership with his wife.
Thanks
I have been asked a question about this and I have never had a client who started a business as a sole trader and then converted to a limited company.
The person wants to sell his assets to the limited company for shares and cash. As stated, he is a sole trader but wants his wife to be a 50% shareholder in the limited company. As CGT allowance for 2016/17 is £11,100, he wants to use his wife's allowance as well to sell to the limited company for £22,200 in cash and the rest in shares.
Am I right in thinking that he cannot use his wife's allowance because he owns the assets? He operates as a sole trader and not in partnership with his wife.
Thanks
Carl Derving FMAAT | Managing Director
AMS Accountants
www.ams4u.co.uk | 01482 257752
AMS Accountants
www.ams4u.co.uk | 01482 257752
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Comments
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Yes correct. Also need to be careful about the values being equiv. to the annual exempt amount too.
no tax relief on the writiing down of the goodwill either.Regards,
Burg0 -
Agree with Burg. It's him that's incorporating so excludes the wife.0
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Hi,
Just out of interest, how does the process of 'the rest in shares' work?
Thanks0 -
He is buying the issued share capital I.e. 100 shares of £1 eachRegards,
Burg0
