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Where Taxpayers and Advisers Meet

A business in debt income exceeds expenditure in year to sell off assets

andrewbell
Posts: 3
Joined: Thu Feb 22, 2018 11:47 pm

A business in debt income exceeds expenditure in year to sell off assets

Postby andrewbell » Fri Feb 23, 2018 12:07 am

I've been running Ltd company for a couple of years. I invested a substantial amount at the beginning, but it hasn't been successful it's had virtually no customers. I'm not too worried as it's been more of hobby to me, I've not charged the business any expenses and don't claim a salary or anything like that as the business has no money.

Last year I made one sale (circa £1000) to sell off an asset and the repayment was immediately made to repay the debt. The next financial year I will have sold off all other assets (circa £4000) and will be closing the business.

The problem is that from a tax point of view my business appears to be making profit as I sell off the assets, while in truth it is substantially in debt to me.

Am able to avoid paying corporation tax on this apparent profit?

Regards
Andrew

RMC
Posts: 409
Joined: Wed Aug 06, 2008 3:35 pm

Re: A business in debt income exceeds expenditure in year to sell off assets

Postby RMC » Mon Feb 26, 2018 12:34 pm

Who sold the asset – you or the company? How much did you pay for it? What was it?

andrewbell
Posts: 3
Joined: Thu Feb 22, 2018 11:47 pm

Re: A business in debt income exceeds expenditure in year to sell off assets

Postby andrewbell » Mon Feb 26, 2018 11:45 pm

Who sold the asset – you or the company? How much did you pay for it? What was it?
The company purpose was selling small boats and related equipment. The assets are our demonstration model which initially include the sale of a canopy which was £1000. The remainder sold was the boat itself £2500. All was sold for similar or less than we paid for it.

The final sale to be made is a shed used to store the companies property.

The company has made all the sales.

RMC
Posts: 409
Joined: Wed Aug 06, 2008 3:35 pm

Re: A business in debt income exceeds expenditure in year to sell off assets

Postby RMC » Tue Feb 27, 2018 12:25 pm

It appears that the company has not been trading. Close it down:
www.gov.uk/strike-off-your-company-from-companies-register/apply-to-strike-off

andrewbell
Posts: 3
Joined: Thu Feb 22, 2018 11:47 pm

Re: A business in debt income exceeds expenditure in year to sell off assets

Postby andrewbell » Tue Feb 27, 2018 12:40 pm

It appears that the company has not been trading. Close it down:
www.gov.uk/strike-off-your-company-from-companies-register/apply-to-strike-off
Thank you, I agree and this has been my intention to close it down. However does this help with my immediate question about corporation tax?


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