Company car or not

Company car or not

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I have a client that owns shares and is a director in a trading company, he currently draws £2,500 a month to pay for an expensive car, he wishes to sell the car to the company, resign as a director and gift the shares to his son, thereby relieving him of the vehicle and its costs.

If he was to use the car at any point how would he be taxed.

For a bit of background he has another business so the potential loss of income is not a consideration.

Thanks

 

 

Replies (10)

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By Rammstein1
12th Mar 2020 10:13

Who would give him permission to use the car if he was not a director or shareholder?

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Lone Wolf
By Lone_Wolf
12th Mar 2020 10:33

He's probably just transferring an expensive BIK to his son, so probably not the best idea.

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RLI
By lionofludesch
12th Mar 2020 10:43

Why not sell the car and get something cheaper?

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By CW2012
12th Mar 2020 10:47

Who would give him permission to use the car if he was not a director or shareholder? - His son the director,

He's probably just transferring an expensive BIK to his son, so probably not the best idea., his son has no use for the car , he already has enough of his own.

How would the HMRC treat any private use

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Replying to CW2012:
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By Rammstein1
12th Mar 2020 10:51

The son would have a BIK on the car.

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Replying to CW2012:
By Tim Vane
12th Mar 2020 10:52

CW2012 wrote:

How would the HMRC treat any private use

With disbelief. (Hint: it’s a company)

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By CW2012
12th Mar 2020 11:11

Why not sell the car and get something cheaper - I thought this but there's no equity in it, apparently the value has dropped like a stone.

What I cant get my head round is who's taxed if a car is used on an occasional basis by a non employee, non director , non shareholder.

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Replying to CW2012:
By SteveHa
12th Mar 2020 11:17

It's made available for private use by reason of the son's directorship. Therefore, the benefit in kind is the son's (based on the original list price of the car).

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Replying to SteveHa:
Lone Wolf
By Lone_Wolf
12th Mar 2020 13:40

Seconded.

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By CW2012
12th Mar 2020 11:21

Thank you SteLacca, that firmly shuts the door on that, the car was well in excess of £100k , imagine the BIK on that.

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