Buying our own assets from the company as directors

zig

Hi,

I am wondering can anyone help on this. Myself and some colleagues have a limited company of which we are all directors.

We want to give ourselves a few of the assets, e.g. computers, cameras etc.

We've agreed ourselves to do it, but from a legal and accounting point of view is there anything we should worry about?

Firstly according to revenue calculations they would have them at a much higher value than they really are. I think they knock off a certain % every year but there is no way I would get even €100 for my work laptop I'd say whereas according to the system it is probably worth about €400.

We want to give them to ourselves for free.

Is it possible to just buy it off the company for a euro and provide a receipt?

Graham

zig wrote: »

We want to give them to ourselves for free.

Is it possible to just buy it off the company for a euro and provide a receipt?

I suspect revenue will have an issue with you buying assets off the company at less than their value.

Go talk to your accountant.

Gloomtastic!

If you have written off an asset over a number of years then at the end of the period you could buy the asset off the company for a pittance.

However, if you personally buy it and then sell that asset on, you may be liable for CGT.

Death and taxes, gets everyone! :mad:

zig

Thanks folks, yea its a pain. You could make an argument about market value for some items but others I am tempted to write off on the basis that trying to sell them on donedeal or wherever would be so messy that it is probably fair to say their market value is 0.

E.g. a semi decent Dell laptop that has been around the blocks for the last 3.5 years. Used every single day and has minor battery issues.

It probably technically still has about €100 on it but according to revenue it is probably worth about €400. I would hate to even try to sell it for €100 because of the work involved in reformating etc. Its got value to me but no one else at this stage.

Or a Dimplex heater, working fine and all, cost €90 new but I see them on Done Deal for €40 , so would probably sell for €30 or €35. Alot of hassle. I wonder are these good arguments to write off their value.

We do have a fairly new laptop and a quality camera so I guess we'll have to value them fairly alright.

ACADasltiv

If there's any sort of value in the item then do not give it to yourself for free. Talk to your accountant about the best way to do it, however really the best way would be to keep a record on file showing the approx. market value of the item as your backup. If going down the private sale route then I'd keep 3 difference sources e.g. Donedeal, adverts.ie etc. If you could get a quote from a second hand electronics retailer giving their value of the laptop then that would cover you. Even better if you had any auctioneer friends who could email you their valuation for what it would sell for.

It absolutely needs to be shown to be an arms length transaction. If a Liquidator was appointed in the morning he may only get €25 for the laptop at auction, but it's €25 more for your creditors than they would have gotten and will be seen as such.

StupidLikeAFox

How much in total are you talking about in terms of the value of the goods?

zig

Probably about 3 - 4K

minikin

Would the company be liable for cgt on the sale of the assets?
As others have said - have a chat with your accountant.

dbran

CGT does not normally apply to wasting assets such as heaters and laptops etc.

They need to be sold at market value if they are going to connected individuals. Otherwise it is a distributon of the assets of the company which would be a disaster from a tax point of view. The point made re a potential liquidation is also quite valid.

Go talk to your accountant about it.

dbran

neris

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Mod: Do not give out dodgy advice like this..

zig

Thats what I was thinking :pac:

Well Im going to be speaking to my accountant later today. He was away for a while so he might be able to give me some tips on making it more straight forward. Thanks for the help!