Husband and wife had two businesses - partnership and limited company.
During last year the assets and trade of the partnership were transferred at book value to the company with credit to DLA.
As both parties elected to transfer assets for cap all purposes at WDV (Nil) there will be an immediate need for a deferred tax provision in the limited company accounts.
First thought was credit provision debit deferred tax chareg in P&L. Then wondered if this is the correct (only?) way to do it.
If agreed, could it be debited to DLA? Is there a choice?
If the former then share value is lower and DLA is higher giving more taxfree funds to draw.
If the second alternative then shareholders funds higher DLA lower.
In this case as shareholders and directors are the same it would seem first alternative is favourite??