Buying an asset for someone else
Buying an asset for someone else
Author
Discussion

DSLiverpool

Original Poster:

16,518 posts

232 months

Wednesday 6th July 2016
quotequote all
My VAT REG ltd company is buying a coach for another vat reg company and the idea is they pay for it over 2 years and we put interest on the repayments.

In other words we can afford to buy an asset another compsny needs and we gain about 10%

What are the implications of this I am sure it's not this simple

TooLateForAName

4,932 posts

214 months

Wednesday 6th July 2016
quotequote all
do you need some sort of credit licence?

DSLiverpool

Original Poster:

16,518 posts

232 months

Wednesday 6th July 2016
quotequote all
We can structure it anyway but I want to keep ownership until paid for - maybe I do it personally / unofficially

Eric Mc

125,742 posts

295 months

Wednesday 6th July 2016
quotequote all
What type of terms and conditions will you be utilising to "lease" the coach to the other business?

Does your company Memorandum and Articles of Association allow your company to conduct this type of business?

Even if it does, is this type of business significantly different from what your company normally does?

anonymous-user

84 months

Wednesday 6th July 2016
quotequote all
why dont you just lend them the money?

DSLiverpool

Original Poster:

16,518 posts

232 months

Thursday 7th July 2016
quotequote all
Eric - the company doesn't do anything like this and I realise it's not workable through it in hindsight.
Desolate - I need some security and didn't want to over complicate it if not paid back. I can take a PG but that still involves court and hassle if defaulted..

If I lend the company the money what's the best way to have security ?



Eric Mc

125,742 posts

295 months

Thursday 7th July 2016
quotequote all
Why can't the other company borrow through normal channels?

If they can' - I certainly wouldn't be lending them anything.

Femur

285 posts

129 months

Thursday 7th July 2016
quotequote all
TooLateForAName said:
do you need some sort of credit licence?
Only relevant for consumer leading AFAIK.

DSLiverpool

Original Poster:

16,518 posts

232 months

Thursday 7th July 2016
quotequote all
Eric Mc said:
Why can't the other company borrow through normal channels?

If they can' - I certainly wouldn't be lending them anything.
The sole director made a mistake about 4 years ago and its tainted his record, the business they have now I am close to and I realise the potential and the opportunity, VIP coaches are in huge demand and the enquiries are far more than can be serviced. . The director has property and a outright owned coach as collateral plus we go back 40 years.


Jockman

18,414 posts

190 months

Thursday 7th July 2016
quotequote all
DSLiverpool said:
The sole director made a mistake about 4 years ago and its tainted his record, the business they have now I am close to and I realise the potential and the opportunity, VIP coaches are in huge demand and the enquiries are far more than can be serviced. . The director has property and a outright owned coach as collateral plus we go back 40 years.
You charging him 10% interest. Did he upset you? smile

DSLiverpool

Original Poster:

16,518 posts

232 months

Thursday 7th July 2016
quotequote all
Jockman said:
DSLiverpool said:
The sole director made a mistake about 4 years ago and its tainted his record, the business they have now I am close to and I realise the potential and the opportunity, VIP coaches are in huge demand and the enquiries are far more than can be serviced. . The director has property and a outright owned coach as collateral plus we go back 40 years.
You charging him 10% interest. Did he upset you? smile
Lol no - it was £30k (and worth it) the seller wants a quick deal and the amount saved by my facilitating the deal comes to me. Having the vehicle now rather than in 6 weeks can make circa £6k in extra revenue, the high demand is summer and xmas. Its purely business.

Eric Mc

125,742 posts

295 months

Thursday 7th July 2016
quotequote all
Have you looked at what type of tax relief YOUR business might or might not be entitled to claim on such an asset?

Have you discussed this with your accountant.

DSLiverpool

Original Poster:

16,518 posts

232 months

Thursday 7th July 2016
quotequote all
Eric Mc said:
Have you looked at what type of tax relief YOUR business might or might not be entitled to claim on such an asset?

Have you discussed this with your accountant.
Waiting on a reply from my accountant who is looking into it, on here you get more than one view of a scenario which I like

anonymous-user

84 months

Thursday 7th July 2016
quotequote all
DSLiverpool said:
Eric - the company doesn't do anything like this and I realise it's not workable through it in hindsight.
Desolate - I need some security and didn't want to over complicate it if not paid back. I can take a PG but that still involves court and hassle if defaulted..

If I lend the company the money what's the best way to have security ?
Obviously you would need to to speak to an accountant but I would say you could lend the company the money and take a charge over the shares in the company or over the vehicle.

Seems like a lot of hassle for the money, but if you want to help him out then it is doable.
For the amounts involved, if you can't trust him on a handshake I wouldn't do it, but that's just me.

DSLiverpool

Original Poster:

16,518 posts

232 months

Friday 8th July 2016
quotequote all
Accountant advises to keep it personal with (if needed) a charge over the property.