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Ross Miller
Ross Miller,
Category: Tax
Satisfied Customers: 1123
Experience:  Director (Litigation and Mediation) at Hilltop Solutions
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I have an incorporated ltd company by share I am the sole

Customer Question

I have an incorporated ltd company by share I am the sole director .I wish to open a new ltd company by share and will have two new directors . Am I able to transfer the costs I’ve spent as a director in the first company to the 2nd company as a directors loan? Ie cost of building website and branding costs?
JA: Have you talked to a tax professional about this?
Customer: Well, I was holding to chat about this with a professional on this site, and hope to discover a professional expert I can then hire
JA: Anything else you want the Accountant to know before I connect you?
Customer: I think that’s all
Submitted: 7 days ago.
Category: Tax
Expert:  Ross Miller replied 7 days ago.

 

 

Hello my name is Ross and I will be the expert assisting you with this matter today.

 

please note there may be delays between messages as the experts on this website are all third party and are not on here full time.

 

Thank you.

 

 

Expert:  Ross Miller replied 7 days ago.

I have read the above, are you asking if you can use money from your own company to fund the website etc. for the new shared company by way of a directors loan agreement?

Customer: replied 7 days ago.
No. I’m probably not expressing this very well
Expert:  Ross Miller replied 7 days ago.

Apologies, are you asking if you can transfer the costs incurred by your company to the new company?

Customer: replied 7 days ago.
Oh yes, that’s exactly it.
Expert:  Ross Miller replied 7 days ago.

Ok from a legal perspective the answer is no. A directors loan is exactly this, a loan from the director which is personally made by them from their own funds. This can then be repaid by the company at a later date free from taxation. It is your company who has incurred these costs and therefore they are responsible to pay them. I appreciate that you will be a director of both companies, however, these are deemed to be two entirely different legal entities. What you could potentially do is loan money from company 2 to pay the costs of company 1. I believe you can make a non-interest loan agreement but you would need to have this set out as legal loan between the companies. What I would suggest is ask your accountant as they may have other accountancy methods to best move the funds between the two companies, but legally you cannot offset your costs from one company to a new company as they are two separate legal entities.

 

I hope this information has helped. You can find a local solicitor who deals with this on the law society webpage which is;

 

https://solicitors.lawsociety.org.uk/

 

I would be obliged if you could Click to “accept” the answer and leave me a 5 star rating (this will not cost any extra). This will tell the website that I have responded to your question, you can, of course, continue to ask any follow up questions free of charge.

 

Kind regards

 

Ross

Customer: replied 7 days ago.
So I guess it’s not a simple way to do this. I’d like to close the original company and transfer the assets over to the new company .
Expert:  Ross Miller replied 7 days ago.

I see, ok well you can do that, but again you will want to involve your accountant in doing this because this has to be done correctly. What you can do is sell all assets from the first company to the second at a fair market value to ensure that you are not "dumping" assets to get out of debt as this is illegal. Your accountant will be the best person to explain on how to do this for you.

 

I hope this information has helped.

I would be obliged if you could Click to “accept” the answer and leave me a 5 star rating (this will not cost any extra). This will tell the website that I have responded to your question, you can, of course, continue to ask any follow up questions free of charge.

 

Kind regards

 

Ross

Expert:  Ross Miller replied 6 days ago.

 

 

I would be obliged if you could Click the 5 stars at the top of the webpage (this will not cost any extra). This will tell the website that I have responded to your question, you can, of course, continue to ask any follow up questions free of charge.

 

Kind regards

 

Ross

Expert:  Ross Miller replied 3 days ago.

 

I would be obliged if you could Click the 5 stars at the top of the webpage (this will not cost any extra). This will tell the website that I have responded to your question, you can, of course, continue to ask any follow up questions free of charge.

 

Kind regards

 

Ross