Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie
Hi there,
There is an issue with role permissions that is being worked on at the moment.
If you are having trouble with access or permissions on regional forums please post here to get access: https://www.boards.ie/discussion/2058365403/you-do-not-have-permission-for-that#latest

S.600 Relief

  • 05-11-2020 6:54pm
    #1
    Time
    Registered Users, Registered Users 2 Posts: 993 ✭✭✭


    Can anyone point me in the direction of a guide for the transfer of business to a company, thats written in plain english. All i can find are ones that essentially copy the revenue guide, unfortunately i'm not an accountant so the terminology is alien to me.


    My own situation is that there'll be a TOB on 01/01 next year with no debt, only assets. I'm planning a sit-down with my accountant before then but would like to research in advance as to whether taking shares for the assets is the only good option available to me.


Comments

  • #2
    LaQuica
    Registered Users, Registered Users 2 Posts: 19 ✭LaQuica


    • The business and all its assets are transferred in exchange for shares in the company.
    • As you are not transferring any liabilities, potentially 100% of the CGT may be deferred.
    • However, not all business assets are chargeable assets - e.g. inventory is not a chargeable asset.
    • So basically, you will be able to defer your CGT liability by the % of chargeable assets over the total amount of assets transferred.
    • The deferred gain then reduces the base cost of the shares for the future when they are disposed of.


  • #3
    Time
    Registered Users, Registered Users 2 Posts: 993 ✭✭✭Time


    LaQuica wrote: »
    • The business and all its assets are transferred in exchange for shares in the company.
    • As you are not transferring any liabilities, potentially 100% of the CGT may be deferred.
    • However, not all business assets are chargeable assets - e.g. inventory is not a chargeable asset.
    • So basically, you will be able to defer your CGT liability by the % of chargeable assets over the total amount of assets transferred.
    • The deferred gain then reduces the base cost of the shares for the future when they are disposed of.

    Thank you! That makes sense, just one question though, where the nearly all of the assets are inventory, how is that treated? Are they generally just a straight transfer with no benefit or liability?


  • #4
    LaQuica
    Registered Users, Registered Users 2 Posts: 19 ✭LaQuica


    Time wrote: »
    Thank you! That makes sense, just one question though, where the nearly all of the assets are inventory, how is that treated? Are they generally just a straight transfer with no benefit or liability?

    Apologies, you can ignore point 3 and 4 above (long day at work). The deferred amount is the market value of the shares over the total value assets transferred.

    Therefore, if you are transferring only assets with no liabilities and no cash consideration, you will be able to defer 100% of the CGT.


  • #5
    Time
    Registered Users, Registered Users 2 Posts: 993 ✭✭✭Time


    LaQuica wrote: »
    Apologies, you can ignore point 3 and 4 above (long day at work). The deferred amount is the market value of the shares over the total value assets transferred.

    Therefore, if you are transferring only assets with no liabilities and no cash consideration, you will be able to defer 100% of the CGT.

    Thanks a million, that clears it all up for me.


  • #6
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    You're basically transferring inventory (not chargeable) with no liabilities to complicate matters so its a very straightforward situation. You won't be paying any CGT. If you don't mind me asking what is the reason you are incorporating?


  • Advertisement
  • #7
    Time
    Registered Users, Registered Users 2 Posts: 993 ✭✭✭Time


    whatnow! wrote: »
    You're basically transferring inventory (not chargeable) with no liabilities to complicate matters so its a very straightforward situation. You won't be paying any CGT. If you don't mind me asking what is the reason you are incorporating?

    It's actually for the purpose of getting a mortgage, i can't get an exemption for 4.5x times income as a single applicant self employed person, but i can as a salaried director.


Advertisement