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Current Personal loan for van how to move to LTD

I currently have a personal loan which was for my van. How to transfer to my new LTD company

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How to transfer my personal loan taken out for my van to my new limited company. So I would not have to take money out of the company to pay for the loan and be taxed on the money I would be taking out 

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By zebaa
13th May 2021 21:23

Ask your lender. They are very likely to say 'NO'. Consider instead charging your company for use of the van via 'mileage rates' .

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By Dantheman109
13th May 2021 21:39

Thanks for the reply.
Is there not a way where I could sell the van to the company as the outstanding balance on the loan and the company paid the loan off in the instalments?

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Replying to Dantheman109:
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By David Ex
13th May 2021 22:02

Quote:

Thanks for the reply.
Is there not a way where I could sell the van to the company as the outstanding balance on the loan and the company paid the loan off in the instalments?

You can do lots of things if you have the necessary permissions from any third parties involved and understand and accept the commercial, tax and accounting consequences. You would need to work through the alternative options and decide which gives you the best outcome for you from a commercial, tax and personal finance perspective.

Have you worked through zebaa’s suggestion to assess its application to circumstances?

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Replying to Dantheman109:
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By Paul Crowley
13th May 2021 23:11

Loan balance irrelevant
You could sell van at market value to company.
Company needs to insure the van, not you

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A Putey FACA
By Arthur Putey
14th May 2021 07:35

Which would create a benefit in kind if there was private use of the van (although the OP did not ask about this it is something else he should consider in order to determine whether he would be better off leaving things as they are and claiming mileage).

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By Dantheman109
13th May 2021 22:23

Thanks. No I have not where is this?

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Replying to Dantheman109:
RLI
By lionofludesch
14th May 2021 07:20

Quote:

Thanks. No I have not where is this?

Where is what?

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Replying to lionofludesch:
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By Paul Crowley
14th May 2021 08:39

OPs Reply was about reading Zebaa, as mentioned by Dan
The first reply on this thread

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By Duggimon
14th May 2021 09:49

Did you take out a bank loan, then use it to buy a van, or did you buy the van on finance?

Either way it's unlikely you can just transfer the loan to the company but there might be other ways around the problem, which depend entirely on the answer to the above.

Have you considered asking your accountant who presumably knows your actual business and doesn't have to rely on the tiny amount of information in your posts?

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By accountaholic
14th May 2021 13:43

Unlikely you'll be able to get the lender to transfer the loan to the company.

Company needs to buy it from you, you pay off your loan with the proceeds, company borrows in its own right against a second hand van it has purchased. If you organise it carefully all the money can go round on the same day so there's no cash flow impact. Of course it depends on your new company being able to raise finance. That's up to the finance company how they assess your company's creditworthiness.

If the sale price from you to company is at or below market value then no tax to worry about. If you need more than market value to clear your loan then this could give you a tax problem.

All possible but could be a few hoops to go through. Start with getting finance in the name of the company. If you can't do that the rest can't happen either so you would have to revert to claiming mileage.

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By Dantheman109
14th May 2021 19:35

I bought the van for £11000 the loan company know it was for a van as they transferred the funds directly to the dealer but still as a personal loan.
I will be setting up my company in the new year which by then the outstanding balance of the loan will be there or there abouts to £10000 which then van would most likely be that value.
So would it be possible to sell the van to the company and the company be able to pay me instalments of the £10,000 which I could pay the loan off with and not be taxed on ? Thank you for your advice

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Replying to Dantheman109:
RLI
By lionofludesch
14th May 2021 19:47

Quote:

I bought the van for £11000 the loan company know it was for a van as they transferred the funds directly to the dealer but still as a personal loan.
I will be setting up my company in the new year which by then the outstanding balance of the loan will be there or there abouts to £10000 which then van would most likely be that value.
So would it be possible to sell the van to the company and the company be able to pay me instalments of the £10,000 which I could pay the loan off with and not be taxed on ? Thank you for your advice

Yes. The only snags will be, firstly, if you don't get paid by the company and, secondly, getting tax relief for the interest might be tricky. Depending on how much is involved, you might want to just forget about that.

Are you VAT registered?

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By Dantheman109
14th May 2021 19:58

How come I would be taxed on Interest when I’d be selling the van for less than I paid for it? I will more than likely become vat registered at some point.
I’d always be able to pay myself from
The company there will be constant money coming in

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Replying to Dantheman109:
RLI
By lionofludesch
14th May 2021 20:13

Quote:

How come I would be taxed on Interest when I’d be selling the van for less than I paid for it? I will more than likely become vat registered at some point.
I’d always be able to pay myself from
The company there will be constant money coming in

The loan is yours.

The interest is yours.

But you will have no trade to deduct that interest from.

On the other hand, your company will have a trade.

But it has no interest. It has no loan.

Whether you sell the van for less, or indeed more, than what you paid for it is bu99er all to do with anything.

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By Dantheman109
14th May 2021 20:30

So I would be taxed on the income I receive from selling my van?

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Replying to Dantheman109:
RLI
By lionofludesch
14th May 2021 20:44

Quote:

So I would be taxed on the income I receive from selling my van

You would be taxed on the proceeds.

Your company will get tax allowances for its expenditure on a second hand van.

Your accountant will tell you about options you may have to make elections.

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