Thank you. Are you saying that ER will be available on the premises transferred to the business but not the land being sold? If so doesn't help me too much has my query is really in relation to the land being sold which a third party is prepared to pay quite a lot for assuming planning permission is obtained.
Thanks I'll have a look at that case. Wasn't sure of the point you were making given this in my question "Firstly I assume that they will need to dispose of the business to ensure that the disposal of the land qualifies for ER under the Associated disposal rules. I believe that this can be achieved by incorporating the business". Could you clarify please? Thanks
Actually just to update on this point, there has been an exchange of contracts but it is conditional on planning permission being obtained and so I am comfortable on that aspect.
It looks as if I was misinformed over the facts. The "Pub" had been a residential property for some time before they bought it. There was no VAT on purchase. The costs have been on improving the property.
So the question is unchanged - can they reclaim the input VAT on the improvements they've made if they let the property as a holiday let. Are they affected by the Capital Goods Scheme.
Thank you for all the comments. Brave/ foolhardy or not, this is what the third party agreed to (the transaction has taken place so I'm not being asked for advice here - I merely have the mess to sort out).
So in respect of the plant and machinery, I'm thinking of crediting the fixed asset disposal account with the net book value of the assets, so that there is no gain or loss in the accounts. Then debit the partners capital accounts with this figure - effectively the gift by each of the partners. Then an election under 266 CAA 2001 to transfer the asset at tax WDV (because of the availability of AIA in recent years this will be NIL).
In respect of the goodwill, assuming both parties agree I assume they make an election under Section 165 TCGA 1992 to hold the gain over?
Sorry, it's the term they use. Basically it's spa treatments - " treatments for arthritis, rheumatism, sciatica, aching joints, back pain, fatigue, insomnia, circulation, stress, muscular pain, stiffness, cramps or tension and we can also provide for the athelete anything from basic, pre and post sports massage right though to rehabilition from injury. Also ..... a specialist beautician for the hydration and beautification of the skin using latest technology and innovative technology". The property is rented and I understand that the son and taken over the lease. So the assets are the assets that relate to this part of the business.
I guess it could be argued that there is also a goodwill element. The assets transferred relate to a hydro centre, the business retained relates to homecare. The relative profitability of the two elements in the past is impossible to ascertain from the records the client provides.
Actually my query was about mainly the tax (although perhaps not clearly expressed). I'm now thinking that the business could make an election under 266 CAA 2001 to transfer the assets at tax WDV. (Sharky and Werner applies to trading stock I believe). Any thoughts?
My answers
Thank you. Are you saying that ER will be available on the premises transferred to the business but not the land being sold? If so doesn't help me too much has my query is really in relation to the land being sold which a third party is prepared to pay quite a lot for assuming planning permission is obtained.
Thanks I'll have a look at that case. Wasn't sure of the point you were making given this in my question "Firstly I assume that they will need to dispose of the business to ensure that the disposal of the land qualifies for ER under the Associated disposal rules. I believe that this can be achieved by incorporating the business". Could you clarify please? Thanks
Actually just to update on this point, there has been an exchange of contracts but it is conditional on planning permission being obtained and so I am comfortable on that aspect.
Thanks for the replies. Definitely worth a letter then.
Thanks for getting back to me.
It looks as if I was misinformed over the facts. The "Pub" had been a residential property for some time before they bought it. There was no VAT on purchase. The costs have been on improving the property.
So the question is unchanged - can they reclaim the input VAT on the improvements they've made if they let the property as a holiday let. Are they affected by the Capital Goods Scheme.
Thanks
Thank you for all the comments. Brave/ foolhardy or not, this is what the third party agreed to (the transaction has taken place so I'm not being asked for advice here - I merely have the mess to sort out).
So in respect of the plant and machinery, I'm thinking of crediting the fixed asset disposal account with the net book value of the assets, so that there is no gain or loss in the accounts. Then debit the partners capital accounts with this figure - effectively the gift by each of the partners. Then an election under 266 CAA 2001 to transfer the asset at tax WDV (because of the availability of AIA in recent years this will be NIL).
In respect of the goodwill, assuming both parties agree I assume they make an election under Section 165 TCGA 1992 to hold the gain over?
Sorry, it's the term they use. Basically it's spa treatments - " treatments for arthritis, rheumatism, sciatica, aching joints, back pain, fatigue, insomnia, circulation, stress, muscular pain, stiffness, cramps or tension and we can also provide for the athelete anything from basic, pre and post sports massage right though to rehabilition from injury. Also ..... a specialist beautician for the hydration and beautification of the skin using latest technology and innovative technology". The property is rented and I understand that the son and taken over the lease. So the assets are the assets that relate to this part of the business.
I guess it could be argued that there is also a goodwill element. The assets transferred relate to a hydro centre, the business retained relates to homecare. The relative profitability of the two elements in the past is impossible to ascertain from the records the client provides.
Yes the assets are ones on which capital allowances have been claimed.
Actually my query was about mainly the tax (although perhaps not clearly expressed). I'm now thinking that the business could make an election under 266 CAA 2001 to transfer the assets at tax WDV. (Sharky and Werner applies to trading stock I believe). Any thoughts?