Using a company car as trade in for private car

paper cut

The company I work for has giving me a chance to use my company car as a trade in for my own private car (i can claim mileage for private car).
The company car is 08 and has no book value as far as the company is concerned.
Question is: Can I use this as a trade in from the company or should I purchase this from the company and then use as a trade in? BIK issues?

Cheers

bazz26

Who's name is down as the registered keeper on the company car's log book?

paper cut

It's in company name. Thanks for the replies. I'll get it changed to my name so.

Just thinking......can the company trade in the car (change of ownership to dealer) and and the new private car change of ownership be transferred into my name?
If not, am I required to have the car in my name for a period of time before i resell or trade in?

Henry Ford III

paper cut wrote: »

It's in company name. Thanks for the replies. I'll get it changed to my name so.

Just thinking......can the company trade in the car (change of ownership to dealer) and and the new private car change of ownership be transferred into my name?
If not, am I required to have the car in my name for a period of time before i resell or trade in?

Yes that's all possible, but any value passing between your employer and yourself will be taxable at your marginal rate.

Joe 90

Reminds of trading in the boss's car about 40 years ago.
He had spotted a car that he liked but was due to go abroad somewhere so he told be to go and have a look and if the price seemed OK, do the deal.

I mad the appointment, collected his wife and went and looked at the car and drove it. It seemed fine, the boss's wife liked it and we settled on a figure with the salesman. Long time ago so I have no idea how much. Before we left I said to the salesman to register the new one in the boss's own name as I kne that the company to which the old car was registered was going to be wound up.

The boss came back from wherever and was happy with the deal and I mention that by the way, that car is in your name because such-and-such-ltd is be ing wound up. Good thinking says he.

A couple of months later I arrived in one morni to a greeting something like "You b4st4rd, I'm going to hang you!"

This was in London and in those days there was no mechanism to enforce parking tickets on a company car so no one paid them. The boss had forgotten that the new cars was in his name and binned all his parking tickets as usual. In due course the police, who enforce parking in those days, had turned up to arrest him. hence the greeting I got the next morning.

colm_mcm

easiest thing to do is buy the car for a nominal amount from the company.

Lockedout2

colm_mcm wrote: »

easiest thing to do is buy the car for a nominal amount from the company.

That's a great idea. Buy the car for €1,000 get a trade in of €5,000.

Would a cash purchase get a discount?

colm_mcm

Buy it for €1 if you can. They just need to invoice it out as it's an asset,

unkel

colm_mcm wrote: »

Buy it for €1 if you can. They just need to invoice it out as it's an asset,

But remember if the car is deemed to be worth say €6000, you're liable for CAT at the marginal rate (could be more than €3000 tax due) as soon as you trade it in against another car (as HFIII said)

Could still be a better way to buy your own car and get the maximum (unvouched and untaxed) mileage rate from your employer

Do your sums!

colm_mcm

car has no value apparently it would have been depreciated every year on their accounts.

Lockedout2

colm_mcm wrote: »

car has no value apparently it would have been depreciated every year on their accounts.

If it has no value then how is he going to trade it in!!!

There is a difference between a zero net book value and having no value!

Henry Ford III

Lockedout2 wrote: »

If it has no value then how is he going to trade it in!!!

There is a difference between a zero net book value and having no value!

In the books though it's a zero transaction. It might be a great way of transferring value to an employee, but it's not without risk - the revenue aren't stupid.

unkel

CAT is based on market value (at the time it's realised) minus acquisition value (what you got it for)

Robert McGrath

unkel wrote: »

But remember if the car is deemed to be worth say €6000, you're liable for CAT at the marginal rate (could be more than €3000 tax due) as soon as you trade it in against another car (as HFIII said)

Could still be a better way to buy your own car and get the maximum (unvouched and untaxed) mileage rate from your employer

Do your sums!

Not CAT. Income tax, PRSI and USC at his marginal rate

unkel

Henry Ford III wrote: »

In the books though it's a zero transaction. It might be a great way of transferring value to an employee, but it's not without risk - the revenue aren't stupid.

You'll have to declare it yourself. Revenue won't find out unless a bit of this transaction comes up in an audit (of either yourself, your employer, the dealer trading in the car, etc.)

Not without risk is right. Don't declare and they find out and you're facing a world of fiscal pain for the rest of your life.

Lockedout2

unkel wrote: »

CAT is based on market value (at the time it's realised) minus acquisition value (what you got it for)

CAT won't apply as the recipient is an employee any benefit would be subject to BIK (I assume that's what you mean).

VincePP

Cash discount on a new or second hand car is 8-10% for many cars.

The trade-in value will take this into account so trade-in is not a true reflection of the car's value.

Ask a car auction place for the price they would hope to get and that's the real value.

Company can sell to you for whatever price they decide is good for the company. You buying it for nominal amount can save time, effort and hassle of other form of selling, thus bik could be argued.