Sole trader to limited company - property transfer

[matlockscot]

Not sure if anyone has any experience of this but here goes;

We have gone from a sole trader (with one 'director / person') to a limited company with 4 directors (one of whom is the company founder). The business owns a number of small industrial units which are currently held in the name of the sole trader business. We want to transfer them to the new limited company as an asset. Is there any way of doing this without generating a 'sale' and thereby incurring all the associated costs (potentially including stamp duty)?

thoughts?

[matlockscot]

Countdown said:

You can transfer the assets at the carrying value (s266 transfer). This means that you sell them for what they are recorded at in your balance sheet (so there is no profit on disposal) and the LtdCo acquires them for the same price.

http://www.taxation.co.uk/taxation/Articles/2012/1...

Presumably this would trigger a stamp duty payment on the sale price?

As for rental - this is what we are currently doing, however, we ultimately would like the asset on the balance sheet

[matlockscot]

A few reasons, not least being potential creation of negative equity on the balance sheet (in the first year at least) which isn't great for credit rating and the fact that rental paid creates taxable income elsewhere (which could be agued will be offset by reduced profits in the ltd co, but first year will show a loss anyway).