Established (dormant) company and incorporation relief

Established (dormant) company and incorporation...

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I run a small business which is on course to make around £40k profit this year (online retail).

Its currently run as a sole trade but given the level of profits, I think its time to incorporate.

The assets will be stock and a very limited amount of fixtures, fittings and computer equipment.  I'm hopefully there will also be some goodwill based onthe valuation I will be submitted to HMRC!

There are a few queries which are fuddling my brain:

1. Should/can I claim incorporation relief? The only chargeable asset will be GW.  ER would be available on the gain (I believe).

2. If yes, is there a time limit to how old the company can be?  I have a dormant company (never traded) which I established for completely separate reasons approx 1 year ago.  I already own 100% of the share capital.  The question really is, can incorporation relief be claimed on an established company, or must be set up immediately at the time of transfer?

Thanks in advance

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By chicken farmer
15th Aug 2014 22:43

Answers
1. Incorporation relief applies automatically if conditions are satisfied but can be disclaimed.

2.No.

BUT go see a tax adviser to confirm that incorporation is advantageous and how to go about it

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