Transferring Fixed Assets in a Group

What are the steps required to transfer Fixed Assets in a group?

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Do we need to carry out a fair value assessment on the Fixed Assets that we are thinking about transffering from one company (A)in a group to another company (B) in the same group?

Do we then need to effectively dispose of the assets by raising a sales invoice from Company A to B and then on the tax side of things calculate if there any balancing charges or gains etc? I assume as the assets are used, there is nil vat payable?

More complex then I thought!

 

Replies (4)

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By tom123
19th Mar 2021 11:12

Are your companies in a VAT group - if so then no need for VAT.
If not a VAT group, then, yes, VAT is generally applicable to used stuff.
(presumably Vans, IT, machinery).

What makes you think sales and purchase invoices are wrong though?

Document it fully, and leave the tax effects to the external people.

On the other hand, does any of this really need doing?

How much ££ are we talking about.

Sometimes one person's desire for 'neatness' creates a whole load of work down the line, to no real gain outside the organisation.

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Replying to tom123:
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By Navola
19th Mar 2021 11:57

Hi, not sure why you ask if I think invoices etc are wrong, don't think I mention that? But thanks for your advice.

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By tom123
19th Mar 2021 12:05

OK - mis read the question.

Must have been reminded of a similar question.

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By paul.benny
19th Mar 2021 11:15

Assuming the subsid is wholly-owned and the assets are plant and equipment rather than real estate:

- no fair value assessment required. Charging net book value avoids creating a profit or loss on disposal that then has to be eliminated on consolidation
- you should raise an invoice so that you have some evidence of the transfer
- if companies are in the same VAT group, you don't need to charge VAT. Otherwise you do.

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