Tax implications of transferring assets from Co A to Co B?

BigFish75

Hi all,

Mods - I orginally posted a version of this query on the Accountancy board before spotting the Taxation board so if this duplication isn't permitted please delete but I feel the Taxation board is possibly more appropriate for my query.

Can anyone here give me some advice on how to go about extracting certain equipment assets from company A which I'm a shareholder and director in to to Company B? Company A isn't performing well so I'd like to take the opportunity to set up a new company which buys the key operating assets of comapny A and then wind down company A. Does that make sense? Company B will tread water for a while until the market improves and then use the assets acquired from comapny A to start trading. Comapany B will trade under a different trading name to company A.

I know as a director of company A I have an obligation to get the best price I can for the assets of the company but when I'm selling to myself (I'm 100% shareholder of company how do I determine the value company B has to pay company A for the assets? Are there any guidelines from the Revenue Commisisons I have to adhere to? Can I used the depreciated book value? Are there any valuers approved by the revenue or somehow qualifed to calculate the appropriate value? How much would they charge for to value 10 items? I know I could ask dealers what they think the value of the equipment is but what they'd be prepared to pay for it would be rock bottom in this market. Do I just pick a figure, do the transaction and hope for the best? What could the consequences be in terms of the Revenue Commisisoners or being struck off as a director of I get it wrong? Does my Accountant have to approve the transaction?

Lot's of questions I know but i haven't done this before so I really don't know what to do and I don't want to ask my Accountant until I have an idea of what the options are as my Accountant is a real "by the book" kind of fella and I know my fellow boardsies will have a practical solution to the problem!!

Regards,

Fish

Mr. Incognito

Please take time to read the charter.

You are talking about complicated structures here. There are a host of tax issues with close company trading and sales to connected companies. However, this advice is not within the remit of this forum.

Go seek a professional.

Also, I'd rather have a "by the books" accountant than relying on rarely qualified totally anonymous internet posters to provide advice.

Thread closed.