Transfer of fixed assets

Discussion in 'Accounts & Finance' started by lukas, Sep 5, 2008.

  1. lukas

    lukas UKBF Regular Free Member

    Posts: 41 Likes: 2
    I've traded as sole trader from December until end of July. Then I've incorporated to limited company. How can I transfer my fixed assets from one to another business. I can dispose them, but what is the price because I didn't sold them to anyone.
    Posted: Sep 5, 2008 By: lukas Member since: Sep 2, 2008
    #1
  2. who_me

    who_me UKBF Regular Free Member

    Posts: 358 Likes: 58
    Your limited company can buy them off you at a reasonable price
    Posted: Sep 5, 2008 By: who_me Member since: Aug 19, 2008
    #2
  3. noidea

    noidea UKBF Regular Free Member

    Posts: 1,978 Likes: 142
    You can simply transfer the ownership to the limited company Or get a bonus by selling it!
    Posted: Sep 5, 2008 By: noidea Member since: Aug 6, 2008
    #3
  4. lukas

    lukas UKBF Regular Free Member

    Posts: 41 Likes: 2
    what you mean by resonable price?
    Posted: Sep 5, 2008 By: lukas Member since: Sep 2, 2008
    #4
  5. noidea

    noidea UKBF Regular Free Member

    Posts: 1,978 Likes: 142
    For how much they are worth.
    Posted: Sep 5, 2008 By: noidea Member since: Aug 6, 2008
    #5
  6. noidea

    noidea UKBF Regular Free Member

    Posts: 1,978 Likes: 142
    You don't need to buy simply transfer ownership.

    People will worry about asset stripping transferring from one company to the other for free or below market value... but it is in effect the same business just now you have incorporated it into its own separate entity so perfectly legal and ethical!
    Posted: Sep 5, 2008 By: noidea Member since: Aug 6, 2008
    #6
  7. lukas

    lukas UKBF Regular Free Member

    Posts: 41 Likes: 2
    I think I'm not geting this right. How can I sell anything to meself.
    So what you saying I have to sell this to my limited company then pay tax on incomes I've made as sole trader and put again in fixed assets of limited company and put this next on my allowances??? Can't I pass them simply to my company as a donation so I'm not geting any money on one side and I'm not spending any money from my company.
    Posted: Sep 5, 2008 By: lukas Member since: Sep 2, 2008
    #7
  8. DIY Accounting

    DIY Accounting UKBF Regular Free Member

    Posts: 701 Likes: 129
    Consdier selling the assets to the limited company which is a separate legal corporate person at the net written down value for tax purposes as they stand in your books.

    That way yourself has made no profit on the transfer in your self employed books, the compasny has acquired the assets and in the company books the amount paid does not have to be paid in cash by the company but can be owed to you as a directors loan account.

    You can subsequently withdraw this money from your directors loan account without it being taxable
    Posted: Sep 5, 2008 By: DIY Accounting Member since: Oct 4, 2007
    #8
  9. lukas

    lukas UKBF Regular Free Member

    Posts: 41 Likes: 2
    This is what I wanted to do on begining but I've been told that I can't. Now I'm bit confused and I'm not sure how can I transfer ownership, mean how to show this in my accounts or rather I'll need sort of agreement can you explain this a bit more?
    Posted: Sep 5, 2008 By: lukas Member since: Sep 2, 2008
    #9
  10. ARK

    ARK UKBF Regular Free Member

    Posts: 215 Likes: 19
    the method Terry Cartwright would be the best one for you, that way you can release earningt from the company back to yourself without having to pay any tax for a while.
    Posted: Sep 5, 2008 By: ARK Member since: Sep 2, 2008
    #10
  11. lukas

    lukas UKBF Regular Free Member

    Posts: 41 Likes: 2
    I'll try with example:

    I've bought laptop as sole trader worth £600 inc VAT. Current market value is £500. I haven't done any depriceation so far. So now I have to sell it to my new limited company for £452.53(500 ex. VAT). And I have to setup additional account in my company COA. And this account will tell me how much I have paid in to my business from my personal money and I can withdraw this money once my business will make enough money without paying extra tax??? I'm sure I've messed things up:(
    Posted: Sep 5, 2008 By: lukas Member since: Sep 2, 2008
    #11
  12. DIY Accounting

    DIY Accounting UKBF Regular Free Member

    Posts: 701 Likes: 129
    No, depreciation is irelevant.
    You would sell the laptop at the net written down value for tax purposes which is the original cost net of vat less any capital allowances cliamed in your self employment.

    If no capitral allowances claimed then it can be sold without tax liability at its original cost net of vat.
    Last edited: Sep 5, 2008
    Posted: Sep 5, 2008 By: DIY Accounting Member since: Oct 4, 2007
    #12
  13. ARK

    ARK UKBF Regular Free Member

    Posts: 215 Likes: 19
    just for this example;

    the purchase of the laptop would be recorded in the company as an asset and instead of paying for this in cach you would set up a directors loan account i.e. you have lent the money to the company therefore in the future when your compay is earning you could repay htis loan from the profit therefore you'd have to pay no tax on it.
    Posted: Sep 5, 2008 By: ARK Member since: Sep 2, 2008
    #13
  14. lukas

    lukas UKBF Regular Free Member

    Posts: 41 Likes: 2
    I haven't claimed any allowances because I bought this laptop last year and I'm just about doing my tax selfassesment for 2007/2008. So I'll not claime anything and sell with original value. What about second part of my example (about puting this into limited company account). The director loan account will go into debt and when I'll make enough money I can pay off myself without tax liability.
    Posted: Sep 5, 2008 By: lukas Member since: Sep 2, 2008
    #14
  15. ARK

    ARK UKBF Regular Free Member

    Posts: 215 Likes: 19
    then i wouldn't claim any alowances.

    and you've got the second part right
    Posted: Sep 5, 2008 By: ARK Member since: Sep 2, 2008
    #15