Change from Sole Trader to Limited Company
I have a sole trader who purchased a car solely for the use of his business (no private use). He was trading as a sole trader for 8 months and now has started a limited company. The car qualifies for writing down allowances at 18% due to the CO2 emissions, so do I put through £720 as a capital allowance in the sole trader accounts and then transfer £3280 to the limited company? Then in the limited company Dr Assets £3280, Cr Director's Loan £3280? As this falls into the capital gains tax allowance, he wouldn't personally have to pay CGT on the gain, but it seems too good to be true that he can take £3280 from the company tax free when the company pays the loan back to the director, then can he claim capital allowances through the company on the remaining £3280? Or am I missing something here? Thank you.