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Selling tools to limited company

CAs / Bal charges etc

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Hi all

I have a client who has incorporated over the past few months, and intendts to move his small pool of tools (approx value £2,000) into the new Ltd co.

The WDV of the pool is £0 (NIL) due to AIA being previously claimed. The depreciated value of the pool in the accounts is £1,500.

Is the correct procedure to transfer the assets at market value (against the directors loac account), but ensure NOT to claim AIA via the company, due to the WDV being £0 in the ST accounts, rather than creating a situation whereby AIA is claimed through the company, and an equal balancing charge is then lodged in the ST accounts?

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By Paul Crowley
18th Jun 2020 18:21

Why bother? Value of tools liable to tax and NI on trader selling. Co can only claim WDA If co goes down, tools go with it.

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Replying to Paul Crowley:
By Wilson Philips
18th Jun 2020 18:36

It’s not nearly as straightforward as that. Individual can transfer for anything between £o and original cost. The optimum value will depend on availability of personal allowance and other factors.

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