Selling personal assets to company...AT PROFIT?

[knight007]

I purchased a printer for £100. It was on special offer (The online price at amazon and other retailers is £209.99).
This was purchased around a month BEFORE I formed my limited company however it was purchased in the interest of my company.

I'm thinking about the following options:

1)Simply claim £100 from my company as pre-incorporation expense. Transfer £100 from my company account into my personal account.

2)Sell it to my company for £100 as a sale of my personal asset to the company. Transfer £100 from company account into my personal account.

3)Sell it to my company for £209.99 as a sale of my personal asset to the company. Transfer £209.99 from company account into my personal account.

Are all three options valid?

Do i have to make up some kind of receipt for options 2 and 3 just for audit trail purposes?

[northernladuk]

Number 2 and write a receipt for it IMO.

Buggering about making 100 quid profit (which you don't as your company money will end up in your pocket eventually anyway albeit a little taxed) is really not worth it.

[Sockpuppet]

In reality option 1 will be as cost effective as option 3. In any case the amount we're talking about you getting better off by is £20 at best between £100 and £210.

[knight007]

how do you work out the £20 ?

[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....

[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]

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.

[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

[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.

[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