Selling company vehicle

[Vickie75]

Limited company owns a van, can we legally sell it to a family member for the settlement figure on the finance, then sell it on for more money?

 

[Gordon - Commercial Finance]

What kind of finance is it? Presuming as you mention settlement it’s on HP?

If so, you can’t legally sell it until after you’ve settled the finance.

 

[Ian J]

If so, you can’t legally sell it until after you’ve settled the finance.

The purchaser can settle the outstanding finance directly and then take ownership of the vehicle as that is what happens when someone part exchanges a vehicle on finance with a dealer

 

[Adam93]

As you will be selling it to an individual that doesn't claim capital allowances at under market value, the value you will uses for the capital allowance disposal is the market value, actual sales proceeds are ignored.

If VAT registered, as you will be selling it to a connected person, the VAT due will also be based on market value.

 

[Ian J]

If VAT registered, as you will be selling it to a connected person, the VAT due will also be based on market value.

Do you charge Vat on disposal of a second hand car?

 

[Gordon - Commercial Finance]

The purchaser can settle the outstanding finance directly and then take ownership of the vehicle as that is what happens when someone part exchanges a vehicle on finance with a dealer

Perhaps that is the way with PCP, but on HP the keeper is not the owner and therefore isn't allowed to sell it until they have paid the settlement.

 

[Adam93]

Do you charge Vat on disposal of a second hand car?

Probably not.

However, the OP refers to a 'van' so yes, they probably should (with a very few exceptions), unless not VAT registered of course.

 

[Mr D]

Limited company owns a van, can we legally sell it to a family member for the settlement figure on the finance, then sell it on for more money?

And that is acting in the best interests of the company?

 

[Vickie75]

The HP will be settled, but was wanting to sell/transfer ownership to a family member for x amount then sell the vehicle to the new buyer for the agreed amount which would be higher than the HP amount. But wondered if this was possible or would it still be classed as benefit in kind by selling it on for profit after a transfer in name?

 

[Ian J]

Probably not.

However, the OP refers to a 'van' so yes, they probably should (with a very few exceptions), unless not VAT registered of course.

Apologies. I should have spotted "van" and not "car"

 

[Ian J]

The HP will be settled, but was wanting to sell/transfer ownership to a family member for x amount then sell the vehicle to the new buyer for the agreed amount which would be higher than the HP amount. But wondered if this was possible or would it still be classed as benefit in kind by selling it on for profit after a transfer in name?

Probably not the most professional answer but who is going to know?

 

[Mark T Jones]

Strictly speaking you can't sell an asset for below it's true value. That does raise questions such a how do you ascertain true value and does anyone really care?