Company investing in Gem Stones

Company investing in Gem Stones

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Director of quite successful company has purchased a precious gemstone for the company.  This is an medium term investment and he is taking the advice of a jewler friend.

The invoice is in the name of the company and everything is above board.  VAT was charged on the purchase.

He advises that he is going to add this to his corporate insurance policy.

He is keeping it in the safe within his house.  I briefly mentioned that if the asset was avaialable for enjoyment by his wife (or him I suppose) there is the BIK issues to consider.

The asset will be held as an investment on the company balance sheet ( I think, not really thought that far ahead yet) so it will be obvious to a compliance officier that it exists.

1) What do we think about the BIK.

2) VAT recoverable and chargeable on sale?  Any issues?  The company is vat registered and its supplies are fully taxable. 

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By Steve Kesby
10th Jan 2012 14:35

Where do you get these clients...

... that engage in the weird and wonderful.

If its not being "enjoyed" in any way by the director or his family, I can't see that there's any "benefit or facility of any kind" that would give rise to a BIK charge.

VAT recovery is based on intention.  If you intend to use the gem to make a taxable supply, you can recover the VAT.

EDIT: Just seen your post on how much it cost, which hasn't changed my view at all.

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By blok
10th Jan 2012 14:34

.

Should have mentioned that it cost c£50k.

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