RE assets introduced and rent

RE assets introduced and rent

Didn't find your answer?

I am currently in the process of preparing accounts for a takeaway . The business was run previously as a sole trade, but has subsequently been incorporated and this is its first period as a Ltd Co.

The proprietors of the sole trade owned the shop and all the kitchen equipment i.e stoves and fryers etc. When the sole trade ceased the capital allowance pool was disposed of for £5k. 

The proprietors of the of the sole trade are the shareholders and directors of the newly formed company and the company pays rent to the directors for the shop space.

My question is can bring in the £5k pool of assets from the sole trade into the Ltd Co. via a directors loan even though the company is paying for rental of the shop?.

I have not yet checked whether or not the rent covers for rental of the kitchen equipment etc, so if your answers could cover both scenarios I should be grateful.

Thanks.

Replies (2)

Please login or register to join the discussion.

avatar
By Angelag123
05th Jul 2015 21:56

If not covered by rent then yes they are needed for the businesses trade so bring them in at £5k via the directors loan account.

An election could be done to transfer the assets at TWDV from sole trader to company.

Thanks (1)
By johngroganjga
06th Jul 2015 08:04

Provided of course that the current owner(s) (you say both "sole trade" and "proprietors") agree(s) to sell the assets to the company for £5,000.

Thanks (1)