How do you make an election

How do you make an election

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Hello all, this is a very simple question.

i would like to make an election to transfer assets from a company which is disincorporating to a sole trader at tax written down value.

How do I actually make this election? Is there a form, do I write a letter?

How do you do this in practise

Ta muchly
Sarah Kedgely

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By Ken Howard
26th Apr 2006 17:23

I don't think you can
As far as I am aware, there are no corresponding elections/reliefs available when disincorporating to those often used when incorporating.

The HMRC standard rules apply, i.e. market value should apply. I.e. balancing allowance/charge on the company and then capital allowances as usual for the sole trader.

No doubt, you are now hoping that there is no significant difference between the tax WDVs and the market value - if there is, you may have a problem. The parties can, of course, agree their own price for the assets, which you may find is close to the tax WDV, (if you know what I mean!!!)

What you also need is a contract of sale between the company and the sole trader to confirm the values agreed between the parties of each asset class - of course, this is good practice anyway to cover everyone.

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By User deleted
26th Apr 2006 20:04

It would be covered by s266 CAA
A transfer between connected persons can be made at tax wdv under s267 of the Capital Allowances Act. Have a look at

http://www.hmrc.gov.uk/taxes_act_2001/vol06/caa01pt02/caa01pt02-258.htm

I would just write a letter signed by both parties to the relevant tax districts stating that the transfer will take place at tax wdv.

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