Hi
I have a client who has a large number of assets in his company, he is wanting to know if these assets should be moved to a separate company which rents the assets back to the original company should the worst happen, are there any implications to this? Company 1 has 5 directors and shareholder (3 silent who do not take salary or dividends as yet) 2 other directors and shareholders who have invested over £100 in plant and machinery, it is the plant and machinery that may be transferred to the new company, the new company, will have 2 directors and shareholders.
Any advice would be greatly appreciated. I know there will be implications of group allowances. The reason for doing this is to protect the assets should anything go wrong, but it would need to be set up correctly and be the right thing to do.
Thanks in advance
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How is the new company to be capitalised? If it does not buy the equipment for cash the problem is not solved.