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CGT on transfer of personal assets into Ltd

Director transfers some equipment that they own personally into their Ltd

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Director has acquired personally (bought and been given) over the years various pieces of equipment. The Ltd co that he owns uses the equipment.

Presumably if he transfers them into the Ltd then any assets valued over £6k he will have to pay CGT on any gain on those items? 

 

 

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By kaff
27th Jun 2019 08:11

In theory, possibly. There’s not enough info here to form a view. Why would he be expecting there to be a gain on second-or third-hand equipment, some of which a previous owner was prepared to give away for free?

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Replying to kaff:
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By Oxford
27th Jun 2019 09:59

This is specialised engineering equipment. One piece of kit would cost c£40k new but the market value if he was to sell the machine in it's current state is c£30k. He paid someone he used to work with for years c£5k for the machine so if he transfers the machine into the company at market value he's personally made c£25k gain (Company owes him £30k and company gets capital allowances on the machine).

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By Vile Nortin Naipaan
27th Jun 2019 10:32

There you go... You keep using the M word... What did he do with these machines when he owned them personally? Did he use them for any business purpose?

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Replying to Vile Nortin Naipaan:
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By Oxford
27th Jun 2019 11:07

He's let the Ltd co use them for nothing up to this point.

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Replying to Oxford:
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By Vile Nortin Naipaan
27th Jun 2019 11:19

Well, tangible moveable property that is machinery, and on which the owner was never able to claim capital allowances is exempt from CGT. That's why clocks and watches are tax-efficient investments.

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Replying to Vile Nortin Naipaan:
Hallerud at Easter
By DJKL
27th Jun 2019 11:32

I wonder if I can sell that argument to my other half,

" I am not buying the Rolex for me, no, not at all, it is a tax efficient investment, that is why I need a Rolex, honest"

and on the plus side a diamond necklace is not machinery so she cannot try it in reverse.

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