I have only recently started practising and this is a situation that I have not come across before:
A Private Hire Taxi client was trading as a partnership with two partners (A & B), profits split equally. Partnership continued for two full years then the partnership was incorporated, partner A became a directer shareholder, partner B left the partnership and did not subscribe to the newco. Newco has another shareholder director (C).
Sharecapital 100, 2 subscribed - A=1, C=1.
The partnerships assets are consist of vehicles and radio equipment, all of these were transferred to the newco.
Unfortunately the clients previous accountant who set up the company is now deceased and the client has no paperwork relating to the incorporation.
Can anyone give me some advice on how to handle this?
Louise Procter
Replies (3)
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.
Hi Louise.
Assets should be injected at market value, but, the NBV of the closing partnership would be ok i think. These items would have been removed (i guess) at market value (or should have been) so this should be the same figure. Therefore, after they have been removed from the partnership, they would have had any relevant capital allowances / balancing charges applied. I can't see a CGT problem if these are handled normally. (unless they made a huge profit on them of course).
I hope this helps.
Have a nice weekend. I still have 16 tax returns left to do - all came in this week. I should have said no, but well, i am a sucker for punishment!
Paul.
What do you need?
Hi Louise. Looks pretty straight forward. What do you need? It looks like the old partnership completely ceased and then a new company formed (as partner B not joined).
If you need memorandum and articles you might be able to get these from companies house. Otherwise, it appears you will start the company books from nil and inject the cars etc.. debiting assets and crediting the relevant director's loan account with the values of these at the date of incorporation. The values will no doubt be avaiable form the partnership final accounts.
Is that the kind of thing you mean? Sorry if this obvious, i wasn't sure what you need to know.
Best wishes.