tax implications of now dissolved company selling assets
Discussion
The correct procedure would have been to remove the assets at their tax written down value from the company at the time of the company dissolution. That then becomes personal income to you but might not be taxable as it was possibly of negligible value or under the Capital Gains Tax threshold.
Had the company claimed any Capital Allowances on these assets when they were purchased and was a final Corporation Tax return submitted to HMRC showing the disposal of these assets and the proceeds on disposal? Don't forget, that if there was no actual cash paid into the company when the assets were disposed of, market value is often substituted in the company's final Capital Allowance disclosure.
There might have been a final Balancing Charge on the disposal of the assets.
I'm sure you took all these things into account these things at the time.
Had the company claimed any Capital Allowances on these assets when they were purchased and was a final Corporation Tax return submitted to HMRC showing the disposal of these assets and the proceeds on disposal? Don't forget, that if there was no actual cash paid into the company when the assets were disposed of, market value is often substituted in the company's final Capital Allowance disclosure.
There might have been a final Balancing Charge on the disposal of the assets.
I'm sure you took all these things into account these things at the time.
Eric Mc said:
The correct procedure would have been to remove the assets at their tax written down value from the company at the time of the company dissolution. That then becomes personal income to you but might not be taxable as it was possibly of negligible value or under the Capital Gains Tax threshold.
Had the company claimed any Capital Allowances on these assets when they were purchased and was a final Corporation Tax return submitted to HMRC showing the disposal of these assets and the proceeds on disposal? Don't forget, that if there was no actual cash paid into the company when the assets were disposed of, market value is often substituted in the company's final Capital Allowance disclosure.
There might have been a final Balancing Charge on the disposal of the assets.
I'm sure you took all these things into account these things at the time.
It was, but how does any of that answer my question about what happens now?Had the company claimed any Capital Allowances on these assets when they were purchased and was a final Corporation Tax return submitted to HMRC showing the disposal of these assets and the proceeds on disposal? Don't forget, that if there was no actual cash paid into the company when the assets were disposed of, market value is often substituted in the company's final Capital Allowance disclosure.
There might have been a final Balancing Charge on the disposal of the assets.
I'm sure you took all these things into account these things at the time.
spikeyhead said:
It was, but how does any of that answer my question about what happens now?
Too late now. You obviously failed to comply with a whole bunch of tax rules. You are just lucky that you are living in an era where HMRC is unable to do its job properly because it went down the "Self Assessment" route over 20 years ago.The inception of "Self Assessing" of taxes over 25 years ago has been an unmitigated disaster for the UK. The Revenue has lost billions (if not trillions) over the decades through not being able to verify whether they are getting accurate information from individuals or businesses.
That is why it is being closed down from 2024.
spikeyhead said:
Four years ago I closed a Ltd company.
I kept some assets that had been depreciated to zero. I've recently sold some at auction for a few £k
I'm now PAYE at the higher rate.
What should I declare for tax purposes?
I'm sure if you look back in your "files", you'll find unpaid out of pocket expenses/mileage on behalf of the business at HMRC rates and lots of misc outstanding amounts if you want to absolve yourself of guilt in relation to heinous exploitation of these probably negligible assets at the time of dissolution were worth.I kept some assets that had been depreciated to zero. I've recently sold some at auction for a few £k
I'm now PAYE at the higher rate.
What should I declare for tax purposes?
I doubt Hank Schrader will be knocking your door down anytime soon
Effectively, that is the correct answer.
But why does the OP suddenly feel he should be declaring this to the tax authorities four years after the event? What prompted him to ask the question now rather than four years ago?
Was he planning on declaring a CGT in his latest tax return?
When he says "a few thousand", how much is he REALLY talking about?
But why does the OP suddenly feel he should be declaring this to the tax authorities four years after the event? What prompted him to ask the question now rather than four years ago?
Was he planning on declaring a CGT in his latest tax return?
When he says "a few thousand", how much is he REALLY talking about?
Eric Mc said:
spikeyhead said:
It was, but how does any of that answer my question about what happens now?
Too late now. You obviously failed to comply with a whole bunch of tax rules. You are just lucky that you are living in an era where HMRC is unable to do its job properly because it went down the "Self Assessment" route over 20 years ago.The inception of "Self Assessing" of taxes over 25 years ago has been an unmitigated disaster for the UK. The Revenue has lost billions (if not trillions) over the decades through not being able to verify whether they are getting accurate information from individuals or businesses.
That is why it is being closed down from 2024.
Eric Mc said:
As long as you were happy. That’s the important thing.
Now come on - that's not very Eric like! 
The OP has simply found himself in legal possession of stuff from which he has managed to extract some financial value and is rightly enquiring as to the tax implication on him personally for this.
I've a garage full of an assortment of stuff that was properly accounted for that came from a now closed Ltd company I co-owned. It could of gone in the skip when we cleared the office out but I elected to keep it and if I could be bothered, could do the same as the OP and make a few quid in Ebay with it.
If the OP is guilt of anything it's overthinking things and hardly subverting the spirit of self-assessment.
His original post seemed to be indicating that he had wound up the company without considering the implications of how remaining assets should be dealt with regarding their extraction for personal use and/or how they were treated in the company's final set of accounts and Corporation Tax return. That was what prompted my initial comments.
His later post states that everything was done correctly - or at least, he trusted his accountant to have done everything properly at the time of the winding up. If that is the case, then he has nothing to worry about regarding the company.
Four years on, he is now selling these assets he got for nothing from his own company and is now wondering (I assume) if there are any Capital Gains issues to be considered. The answer is, yes there are - but since he hasn't given us any details whatsoever as to the actual proceeds he received on the sale of these assets it is completely impossible to give him any meaningful advice as to what those Capital Gains Tax issues might be.
The only thing he needs to know is that, if the sale of these asset disposals - combined with any other capital disposals he has made in the tax year - generated total gains less than £12,300 (assuming we are talking about tax year 2020/21) then there will be no Capital Gains Tax liability arising.
If the proceeds on disposal exceeded £49,200, then he should still declare the capital disposal in his Self Assessment tax return, even if no gain arose.
If the asset disposed of was classified as Residential Property, there is a totally separate on-line reporting regime which is in addition to Self Assessment.
As per HMRC -
You still need to report your gains in your tax return if both of the following apply:
the total amount you sold the assets for was more than 4 times your allowance
you’re registered for Self Assessment
His later post states that everything was done correctly - or at least, he trusted his accountant to have done everything properly at the time of the winding up. If that is the case, then he has nothing to worry about regarding the company.
Four years on, he is now selling these assets he got for nothing from his own company and is now wondering (I assume) if there are any Capital Gains issues to be considered. The answer is, yes there are - but since he hasn't given us any details whatsoever as to the actual proceeds he received on the sale of these assets it is completely impossible to give him any meaningful advice as to what those Capital Gains Tax issues might be.
The only thing he needs to know is that, if the sale of these asset disposals - combined with any other capital disposals he has made in the tax year - generated total gains less than £12,300 (assuming we are talking about tax year 2020/21) then there will be no Capital Gains Tax liability arising.
If the proceeds on disposal exceeded £49,200, then he should still declare the capital disposal in his Self Assessment tax return, even if no gain arose.
If the asset disposed of was classified as Residential Property, there is a totally separate on-line reporting regime which is in addition to Self Assessment.
As per HMRC -
You still need to report your gains in your tax return if both of the following apply:
the total amount you sold the assets for was more than 4 times your allowance
you’re registered for Self Assessment
Eric Mc said:
His original post seemed to be indicating that he had wound up the company without considering the implications of how remaining assets should be dealt with regarding their extraction for personal use and/or how they were treated in the company's final set of accounts and Corporation Tax return. That was what prompted my initial comments.
His later post states that everything was done correctly - or at least, he trusted his accountant to have done everything properly at the time of the winding up. If that is the case, then he has nothing to worry about regarding the company.
Four years on, he is now selling these assets he got for nothing from his own company and is now wondering (I assume) if there are any Capital Gains issues to be considered. The answer is, yes there are - but since he hasn't given us any details whatsoever as to the actual proceeds he received on the sale of these assets it is completely impossible to give him any meaningful advice as to what those Capital Gains Tax issues might be.
The only thing he needs to know is that, if the sale of these asset disposals - combined with any other capital disposals he has made in the tax year - generated total gains less than £12,300 (assuming we are talking about tax year 2020/21) then there will be no Capital Gains Tax liability arising.
If the proceeds on disposal exceeded £49,200, then he should still declare the capital disposal in his Self Assessment tax return, even if no gain arose.
If the asset disposed of was classified as Residential Property, there is a totally separate on-line reporting regime which is in addition to Self Assessment.
As per HMRC -
You still need to report your gains in your tax return if both of the following apply:
the total amount you sold the assets for was more than 4 times your allowance
you’re registered for Self Assessment
Fair enough. Must admit I read it differently but I guess that's why Im not an accountant! His later post states that everything was done correctly - or at least, he trusted his accountant to have done everything properly at the time of the winding up. If that is the case, then he has nothing to worry about regarding the company.
Four years on, he is now selling these assets he got for nothing from his own company and is now wondering (I assume) if there are any Capital Gains issues to be considered. The answer is, yes there are - but since he hasn't given us any details whatsoever as to the actual proceeds he received on the sale of these assets it is completely impossible to give him any meaningful advice as to what those Capital Gains Tax issues might be.
The only thing he needs to know is that, if the sale of these asset disposals - combined with any other capital disposals he has made in the tax year - generated total gains less than £12,300 (assuming we are talking about tax year 2020/21) then there will be no Capital Gains Tax liability arising.
If the proceeds on disposal exceeded £49,200, then he should still declare the capital disposal in his Self Assessment tax return, even if no gain arose.
If the asset disposed of was classified as Residential Property, there is a totally separate on-line reporting regime which is in addition to Self Assessment.
As per HMRC -
You still need to report your gains in your tax return if both of the following apply:
the total amount you sold the assets for was more than 4 times your allowance
you’re registered for Self Assessment
Eric Mc said:
spikeyhead said:
It was, but how does any of that answer my question about what happens now?
Too late now. You obviously failed to comply with a whole bunch of tax rules. You are just lucky that you are living in an era where HMRC is unable to do its job properly because it went down the "Self Assessment" route over 20 years ago.The inception of "Self Assessing" of taxes over 25 years ago has been an unmitigated disaster for the UK. The Revenue has lost billions (if not trillions) over the decades through not being able to verify whether they are getting accurate information from individuals or businesses.
That is why it is being closed down from 2024.
Yes - it was first announced in Chancellor Osborne's budget statement in 2015. The original plan was for it to be introduced on 6 April 2018. After much protest, the implementation was deferred. The current announced start date is the start of tax year 2024/25.
Those who normally don't submit self assessment returns at the moment will need to pay attention to their Digital Tax Account (DTA - every tax payer has one). If any circumstances change within the year, the tax payer has 30 days to ensure their DTA is up to date and correct. There will be fines and penalties for failing to maintain the DTA.
Those who currently submit Self Assessment tax returns may drop back into the maintaining of the DTA maintenance regime. For example, if you have to submit a Self Assessment return at the moment in order to repay Child Benefit, updating the DTA might be sufficient in the future.
Those who have to submit a Self Assessment return because of a one-off event, such as a Capital Gain, will need to submit an electronic submission of the Capital Gain details. This regime is already in place for those who have to notify HMRC of the disposal of a residential property.
Those who currently submit Self Assessment tax returns because they are self employed sole traders, partners in partnerships or who receive rental income, will be moving on to a new THREE MONTHLY reporting regime. In other words, the tax payer will need to submit their income details to HMRC every three months using approved commercial software.
If a taxpayer has more then one source of self employed income or has a combination of the above (self employment, rent etc) will need to submit SEPARATE three monthly electronic submissions for each source. Some individuals nay end up supporting far more than four quarterly returns.
In addition tho this, for each source, the tax payer will also have to make an annual "reconciliation" submission. It is on the 5th submission that the various "annual" claims and reliefs will be made, such as loss relief or capital allowances. It is also the opportunity to correct the errors that were made in the previous four submission.
A separate 5th submission is needed for each source.
A further complication is that the tax year is being changed in 2024. We don't yet know what the new tax year will be - it is likely to either be a year end of 31 December or 31 March - but the old 5 April tax year is coming to an end.
Another complication is that the basis period for sole trader and partnership accounts is changing. It looks like HMRC will not recognise business year ends any more and will be forcing ALL businesses (NOT limited companies) to adapt the tax year as their business year - irrespective as to whether this suits the business cycle of any given business.
As you can see, these changes are fundamental and far reaching. What is shocking is the lack of Government information being provided to all taxpayers. There will not be a single taxpayer in the UK who will not be affected by these changes.
Those who normally don't submit self assessment returns at the moment will need to pay attention to their Digital Tax Account (DTA - every tax payer has one). If any circumstances change within the year, the tax payer has 30 days to ensure their DTA is up to date and correct. There will be fines and penalties for failing to maintain the DTA.
Those who currently submit Self Assessment tax returns may drop back into the maintaining of the DTA maintenance regime. For example, if you have to submit a Self Assessment return at the moment in order to repay Child Benefit, updating the DTA might be sufficient in the future.
Those who have to submit a Self Assessment return because of a one-off event, such as a Capital Gain, will need to submit an electronic submission of the Capital Gain details. This regime is already in place for those who have to notify HMRC of the disposal of a residential property.
Those who currently submit Self Assessment tax returns because they are self employed sole traders, partners in partnerships or who receive rental income, will be moving on to a new THREE MONTHLY reporting regime. In other words, the tax payer will need to submit their income details to HMRC every three months using approved commercial software.
If a taxpayer has more then one source of self employed income or has a combination of the above (self employment, rent etc) will need to submit SEPARATE three monthly electronic submissions for each source. Some individuals nay end up supporting far more than four quarterly returns.
In addition tho this, for each source, the tax payer will also have to make an annual "reconciliation" submission. It is on the 5th submission that the various "annual" claims and reliefs will be made, such as loss relief or capital allowances. It is also the opportunity to correct the errors that were made in the previous four submission.
A separate 5th submission is needed for each source.
A further complication is that the tax year is being changed in 2024. We don't yet know what the new tax year will be - it is likely to either be a year end of 31 December or 31 March - but the old 5 April tax year is coming to an end.
Another complication is that the basis period for sole trader and partnership accounts is changing. It looks like HMRC will not recognise business year ends any more and will be forcing ALL businesses (NOT limited companies) to adapt the tax year as their business year - irrespective as to whether this suits the business cycle of any given business.
As you can see, these changes are fundamental and far reaching. What is shocking is the lack of Government information being provided to all taxpayers. There will not be a single taxpayer in the UK who will not be affected by these changes.
I used to suffer from this form of self imposed misery, the company is dissolved, according to you, you took reasonable care by getting an Accountant to deal with the matter. Provided you didn’t “forget” to mention or include these items, the accountant will as far as you are required have taken them into account and recorded them correctly.
If the above is correct and the items are not on a very short list (art etc) , then it is like selling a lawn mower or barbel, you seem to be over thinking this..
Go on just answer website and for £50 you will get a fully insured answer and phone call with a CTA, you’ll need to layout a short history before anyone replies
I can vouch for the site so long as you give them all the info, no one normal wants to fall foul of HMRC and you probably haven’t but for £ 50 you buy piece of mind or at least get good advice, I had a tree issue and the local solicitor wanted £1500 plus vat , I found a solicitor on just answer who specialised in these things and got all the advice I needed for £75. I can write a letter myself so long as I know what to put in it.
If the above is correct and the items are not on a very short list (art etc) , then it is like selling a lawn mower or barbel, you seem to be over thinking this..
Go on just answer website and for £50 you will get a fully insured answer and phone call with a CTA, you’ll need to layout a short history before anyone replies
I can vouch for the site so long as you give them all the info, no one normal wants to fall foul of HMRC and you probably haven’t but for £ 50 you buy piece of mind or at least get good advice, I had a tree issue and the local solicitor wanted £1500 plus vat , I found a solicitor on just answer who specialised in these things and got all the advice I needed for £75. I can write a letter myself so long as I know what to put in it.
Just be careful with these "quick answer" sites. You don't know the calibre of the person giving the advice and you will have absolutely no comeback if the advice is not correct.
Up to now, the OP has not given sufficient information to enable a proper, professional answer to his original question to be given.
Effectively, we would need to know far more about the actual values, numbers and dates involved before we could truly answer his original queries.
Up to now, the OP has not given sufficient information to enable a proper, professional answer to his original question to be given.
Effectively, we would need to know far more about the actual values, numbers and dates involved before we could truly answer his original queries.
Eric Mc said:
Just be careful with these "quick answer" sites. You don't know the calibre of the person giving the advice and you will have absolutely no comeback if the advice is not correct.
Up to now, the OP has not given sufficient information to enable a proper, professional answer to his original question to be given.
Effectively, we would need to know far more about the actual values, numbers and dates involved before we could truly answer his original queries.
I absolutely agree, things like just answer are only as good as both user and respondent, Up to now, the OP has not given sufficient information to enable a proper, professional answer to his original question to be given.
Effectively, we would need to know far more about the actual values, numbers and dates involved before we could truly answer his original queries.
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