Reply to: Selling personal assets to company...AT PROFIT?

[Nixon Williams]

I'll be giving Siobhan a ring then.

What about writing company assets off then? Do I just stop using it, buy it off ltd co, or give to "charity".

qh

If the asset has never been treated as an asset (ie shown on the balance sheet) then there is nothing to 'write off'.

If the 'asset' is no longer required by the company and it has some value, then you could buy the asset from the company, or just scrap it if it has no use.

Alan

[quackhandle]

I'll be giving Siobhan a ring then.

What about writing company assets off then? Do I just stop using it, buy it off ltd co, or give to "charity".

qh

[Nixon Williams]

Sorry. I miss the Dredd pic, though.

So there is a limit on £500, any more and it is a company asset? I'll have to have a read up on that, as I went a bit daft configuring one on the lenovo site, came to over a grand!

qh

The 'limit' of £500 has no basis other than being a view taken by some accountants, including ourselves.

Technically you could treat many items as an asset if its useful life to the business is spread over a lengthly period, so you could treat a stapler as an asset even though it only cost £5!

It is generally not worth the extra admin to treat small valued assets in such a way.

With most small companies benefiting from full tax relief of 100%, from a tax point it will not make any difference whether the asset is treated as such or fully written off in the year of purchase.

Alan

[northernladuk]

Sorry. I miss the Dredd pic, though.

So there is a limit on £500, any more and it is a company asset? I'll have to have a read up on that, as I went a bit daft configuring one on the lenovo site, came to over a grand!

qh

Here is one of the links that mentions less than 500 can be an expense

http://forums.contractoruk.com/accou...t-expense.html

I would say a grand is firmly in asset territory.

Couldn't find a valentines Dredd picture so had to make do with Rogue Troopers bit of stuff Venus Blue... I need to go out more I think

[quackhandle]

Sorry. I miss the Dredd pic, though.

So there is a limit on £500, any more and it is a company asset? I'll have to have a read up on that, as I went a bit daft configuring one on the lenovo site, came to over a grand!

qh

[northernladuk]

Similar to OP but otherway round. Have had my Dell Studio lappy for nearly two years purchased as "company laptop" (not that expensive 450 notes) which it actually is as I have a home pc as well, but am using it for latest gig and it's getting a pain carrying it around (2.6kg) would like something a little lighter and with better software on it - so I was wondering if I could buy it from my company at a fee then get my company to buy one of those spiffing Lenovo Thinkpads I have seen.

My LM is a contractor and he suggested just writing it off as old stock, at two years its too out date to perform my duties efficiently.

Any thoughts? (about my post, not stuff in general, tell that to NLUK.)

qh

You are mean!!!

Seems pretty straight forward. You could give your old one away to charity for free <cough> and that is that out of the way and just go and buy your new one. Anything under £500 would be better as an expense rather than an asset from what I remember of previous posts on this. Don't forget the bag, AV software etc as well.

[quackhandle]

Buying my company laptop...

Similar to OP but otherway round. Have had my Dell Studio lappy for nearly two years purchased as "company laptop" (not that expensive 450 notes) which it actually is as I have a home pc as well, but am using it for latest gig and it's getting a pain carrying it around (2.6kg) would like something a little lighter and with better software on it - so I was wondering if I could buy it from my company at a fee then get my company to buy one of those spiffing Lenovo Thinkpads I have seen.

My LM is a contractor and he suggested just writing it off as old stock, at two years its too out date to perform my duties efficiently.

Any thoughts? (about my post, not stuff in general, tell that to NLUK.)

qh

[northernladuk]

I used to offer a service where you could get get 20% VAT over the £209 via a Dutch Antilles trust structure, but in the end it just wasn't worth it.

Hey OG.....

[Old Greg]

LOL

you have not started the Ltd co and yet you are full of ideas how to run circles round the taxman.

Personally i will go for option 1 and sleep well at night

css_jay99

I used to offer a service where you could get get 20% VAT over the £209 via a Dutch Antilles trust structure, but in the end it just wasn't worth it.

[css_jay99]

LOL

you have not started the Ltd co and yet you are full of ideas how to run circles round the taxman.

Personally i will go for option 1 and sleep well at night

css_jay99

[Clare@InTouch]

Along the same lines as the OP,

I bought an expensive laptop back in 2008 solely for use for work. At the time I was working through an umbrella so couldn't expense it, I just paid for it from my own bank account (via paypal as it was from Flea-Bay).

I paid £1200 for it.

I went limited in Dec 2010, so can I sell this laptop to the Ltd Co, as it is still solely used for my business.

Its pretty obvious its a work only laptop, Its a Panasonic Toughbook Cf-19, and in the environment I work it, pretty much essential unless I want to buy a new laptop every year as previous one has been damaged. Its used to connect to vendors equipment, invoicing, timesheets. For home use I use another PC, even take my home laptop with me when im in accomodation as the small keyboard of the Cf-19 is impractical.

Steve

Absolutely fine, just sell it to the company by adding it to your Expenses. I'd suggest looking on Ebay or similar for a reasonable second hand value to use.

[Tomo1971]

Along the same lines as the OP,

I bought an expensive laptop back in 2008 solely for use for work. At the time I was working through an umbrella so couldn't expense it, I just paid for it from my own bank account (via paypal as it was from Flea-Bay).

I paid £1200 for it.

I went limited in Dec 2010, so can I sell this laptop to the Ltd Co, as it is still solely used for my business.

Its pretty obvious its a work only laptop, Its a Panasonic Toughbook Cf-19, and in the environment I work it, pretty much essential unless I want to buy a new laptop every year as previous one has been damaged. Its used to connect to vendors equipment, invoicing, timesheets. For home use I use another PC, even take my home laptop with me when im in accomodation as the small keyboard of the Cf-19 is impractical.

Steve

[Sockpuppet]

You can sell the printer to your company for £209.99 as long as it’s an “arm’s length transaction”, which means the transaction with yourself is transparent and at a fair market value.

There would not be any personal tax issues with this as it’s a personal asset and you are not selling the printer as part of a trade. I would record this transaction and use evidence to support your valuation and a related party note should be placed in the published company accounts. I would also go as far as documenting a directors meeting too, just for precaution.

The only problem would arise if HMRC asked why you purchased a printer at £100 a month ago and then valued it at £209.00 a month later. The obvious argument is “current replacement cost” as per amazon, but would this meet the fair market value assessment?

For the sake of somewhere between £4 and £20? It'd probably cost you more in time to write the paper work than just using option 1.

[NimbusAccounting]

You can sell the printer to your company for £209.99 as long as it’s an “arm’s length transaction”, which means the transaction with yourself is transparent and at a fair market value.

There would not be any personal tax issues with this as it’s a personal asset and you are not selling the printer as part of a trade. I would record this transaction and use evidence to support your valuation and a related party note should be placed in the published company accounts. I would also go as far as documenting a directors meeting too, just for precaution.

The only problem would arise if HMRC asked why you purchased a printer at £100 a month ago and then valued it at £209.00 a month later. The obvious argument is “current replacement cost” as per amazon, but would this meet the fair market value assessment?

[Sockpuppet]

how do you work out the £20 ?

If you pay yourself £100 for the printer that has reduced your CT by £20.

If you pay yourseld £200 for the printer that has reduced your CT by £40.

As you can pay dividends from profit with no extra tax to pay the difference between the two is £20 not the £100 you're thinking off.

Then if you want to be really thorough doing option 1) you can reclaim the VAT of £20 from the printer which will give you a net extra of £16 to pay as dividends you can't do this for option 2) or 3) (assuming non flat rate) so in reality you're standing to gain around £4 from this scam....sorry sale.

I reckon it's probably cost client co more than £4 for me in the time it took me to type this....