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Where Taxpayers and Advisers Meet

Gifting items bought under First Year Allowance

nkarim
Posts:1
Joined:Mon Aug 22, 2016 10:06 pm
Gifting items bought under First Year Allowance

Postby nkarim » Mon Aug 22, 2016 10:17 pm

Hello all. I was wondering if anyone could clear a situation up for me. My father in law is due to be giving us a sum of money soon. Co incidentally, I am planning on buying a Tesla car.
As Teslas are electric, they qualify for 100% First Year Allowance. My father in law normally takes dividends from the profits of his company and pays tax accordingly.
My question is first, is it legal for the car to be bought through the company and be gifted to me as soon as it has been written off against the profits for that year? Secondly it that is possible, are there any other taxes to be paid on transfer (BIK etc) if it is gifted rather than sold?


Thank you

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Gifting items bought under First Year Allowance

Postby bd6759 » Tue Aug 23, 2016 8:47 am

Capital Allowances are only due if the expenditure is incurred for the purposes of the qualifying activity. Gifting is not a qualifiying acitivty.
The disoposal of the vehicle would bring in a balancing charge which would reverse any allowances given.
The disposal would be income of the director.


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