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Is there a capital allowances tax planning opportunity available when a business is transferred to a newly formed company? Can the rule that assets must be transferred at market value be avoided if they are transferred before the transfer of the business itself?
On recent tax courses a tax planning opportunity has been mentioned with regard to balancing adjustments for capital allowances purposes. We understand that assets can be sold from a business to a newly formed company prior to the incorporation of that business.
There is no requirement to sell at market value (except for expensive cars and short-life assets) so the disposal proceeds can be set to give the required tax result. So far so good but what is the position if there is outstanding finance on an asset being transferred?
We are considering the incorporation of a partnership client and while the optimum sale proceeds figure for plant and machinery from the partnership to the company would be £20 000 there is outstanding finance of £150 000. If the new company adopts the finance it becomes insolvent. Furthermore can the figure of £20...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
