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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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I currently run my retail business as a sole trader but wish

Resolved Question:

I currently run my retail business as a sole trader but wish to form a UK limited company.
The problem I'm concerned with is the stock I already own; how do I value it (I sell about 500 different lines) and how do I show HMRC this transfer of ownership from myself to the ltd co.?
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Hello my name is ***** ***** I will help you with this.
This is no different from an end of year stock check for accounting purposes. Your accountant should value this for you, but generally it would be the current value of the stock.
Can I clarify anything for you about this today please?
Alex
Customer: replied 2 years ago.

The impression I get from reading about this situation is that in effect I sell my assets (the stock) to the limited company. Surely if this is the case I need to show this to HMRC as a credit to me as sole trader and a debit to the ltd co. Is that correct, and if so whereabouts on a tax return would you put such items?

Expert:  Ash replied 2 years ago.
Yes it would be an asset. When sold you put this in the income column. The debit could be that is your capital into the ltd co which you dont record on a tax return.
Alex
Ash and other Law Specialists are ready to help you
Customer: replied 2 years ago.

How accurate does the valuation need to be? It would take a long time to find out the purchase price for each stock item and also stock levels fluctuate on an hourly basis as they are sold.

Expert:  Ash replied 2 years ago.
It needs to be as accurate as you can reasonably make it.
Alex
Expert:  Ash replied 2 years ago.
Hi

I am just following up to see if there is anything else I can help with?

If this answers your question might I ask you to rate my answer before you go today please, the button should be at the bottom of the screen.

If you need more help please click reply.

Alex