My new self employed client who has a chauffeuring business thinks of closing down and considers two options:
Keeping privately a car with about £20k WDV. This is the only asset of the company, over 160g/km CO2 car written down previously at 8%.
Selling a car for £15k which would result in balancing allowance of £5k (ignoring here private use adjustment).
If he personally keeps the car, effectively with Nil disposal, taking it out of the business, does that mean he gets £20k balancing allowance? It does not seem right... Will that need to go on the return as a gift received or something? Will it make any difference if the business sells the car to his wife at a nil amount?
I normally deal with limited companies and this does my head in.
Many thanks in advance for any enlightement...