Reply to: Sell company iMac

[northernladuk]

But if the company transfers ownership/gifts it 'De minimis' to the director first?, there is no tax for the director to pay as it has a book value of $0

Did Fraidycat get it wrong again? Whodathunk it.

[TheCyclingProgrammer]

A fully depreciated asset still belongs to the company and any gain from its resale needs to be recorded in your P&L.

Is the only correct answer. And if you’re selling it to yourself do make sure it’s at a reasonable market rate or it could be considered a BIK. You also need to account for VAT on the sale if you’re VAT registered.

If it genuinely has negligible resale value you could just treat it as “scrapped”. The tax man is unlikely to know or care if it happens to find its way into your home.

Depending on the spec a 4 year iMac is likely to have a resale value though.

[jamesbrown]

If it had zero value, there would be no point trying to sell it.

[Lance]

That puts a whole different spin on it. A low end general PC will be practically worthless over the same period.

a 'faulty' 2016 iMac is worth zero though.

[northernladuk]

iMac's aren't laptops. And a 2016 model with a decent processor is still worth £500+

That puts a whole different spin on it. A low end general PC will be practically worthless over the same period.

[adubya]

For a four year old laptop?

I would expect that depreciation would have reduced the capital to £0, but you’ll need to confirm that with your accountant.

iMac's aren't laptops. And a 2016 model with a decent processor is still worth £500+

[Craig@Clarity]

Hello,

I bought an iMac for my limited company in May 2016. I am looking to sell the iMac, do I need to inform my accountant & am I supposed to pay the money received from selling the iMac back into the business?

Kind Regards

When you sell the iMac, raise an invoice for it. The money received from the sale goes into the company bank account. Let your accountant know that you've sold it.

[cojak]

Let's combine all the posts above

The company book value will be zero as it should be fully depreciated.

And while in the ideal world you should be booking the sale in the company (as LM states) after 4 years it's probably broken in some way or other (if it was a Lenovo, Dell or Surface device it would definitely have broken in that period) - so it's hardly the biggest crime to not pass the money back to the company.

Before anyone asks it's why I now treat laptops as disposable items and never spend more than £1k including VAT on them.

Refurbished Dells all the way...

[jamesbrown]

But if the company transfers ownership/gifts it 'De minimis' to the director first?, there is no tax for the director to pay as it has a book value of $0

Any benefit to an employee for tax purposes is based on the market value of the depreciated asset on the date of transfer (i.e., what you would get if you sold it second-hand ), not the book value in the company accounts.

[ladymuck]

Or it's not really a 4 year old iMac but some classic bit of kit that will fetch a fortune from a collector. The OP used company funds to buy it speculatively as they didn't want take funds out and incur tax and are now stuck on how to get their mitts on the profits

[Fraidycat]

But if the company transfers ownership/gifts it 'De minimis' to the director first?, there is no tax for the director to pay as it has a book value of $0

[jamesbrown]

A fully depreciated asset still belongs to the company and any gain from its resale needs to be recorded in your P&L.

[Lance]

Whilst probably valued at zero it needs to be disposed of correctly. If you just sell it and trouser the cash that is theft.
If you buy it personally and resell it for more then that is fraud as you’ve have knowingly sold it to yourself at less than it’s worth.

The reality is that if it’s ‘faulty’ it goes and the accountant removes it from the asset list. What happens after that is fine as long you’re not dishonest....

So in a roundabout way we’re saying do what you want but treat it properly in the company books and deny all knowledge if ever challenged.

[eek]

Let's combine all the posts above

The company book value will be zero as it should be fully depreciated.

And while in the ideal world you should be booking the sale in the company (as LM states) after 4 years it's probably broken in some way or other (if it was a Lenovo, Dell or Surface device it would definitely have broken in that period) - so it's hardly the biggest crime to not pass the money back to the company.

Before anyone asks it's why I now treat laptops as disposable items and never spend more than £1k including VAT on them.

[northernladuk]

No.