Selling personal electric car to LTD

I started a ltd before few months of which I am the sole director. Four months before the company was formed, I bought a new electric car. 
Ideally I should have bought after forming the company to be able to claim 100%. But its done, so what are my options now?

- can I sell my less than year old car to my LTD(used purchase)? 
- can I keep the v5c in my name, or do i have to change it to ltd ?

Thanks!

Comments

  • Grumpy_chap
    Grumpy_chap Posts: 14,361
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    You would have to sell the car to the Ltd at current market value.  Ideally, you would need a way to demonstrate that you used a fair valuation, so WBAC / Motorway type figures would be one way to demonstrate that.

    The company would not be able to claim the 100% write down as it is a used car that the company will be purchasing and the 100% write down is for brand new EVs only.  Standard write-down will be available.

    You, as an individual will become liable for BIK at the appropriate rate (currently 2%) of the original brand new list price when the car was registered.  That is list price, not actual price after any discounts.

    When the car is subsequently sold, the value will become value on the Ltd balance sheet and may give rise to a corporation tax liability in that year.

    There is no need to change the V5 - it says at the very top "registered keeper is not proof of ownership" or something to that effect.

    I started a ltd before few months of which I am the sole director. Four months before the company was formed, I bought a new electric car. 
    Ideally I should have bought after forming the company to be able to claim 100%. But its done, so what are my options now?

    - can I sell my less than year old car to my LTD(used purchase)? 
    - can I keep the v5c in my name, or do i have to change it to ltd ?

    Thanks!

  • So a letter saying the car was sold by Mr x to Ltd company Y on that date for £££££ amount would suffice as a proof ?
    Transferring that amount to personal account from ltd bank account as well and let my accountant know about it at the time of filing?
  • DullGreyGuy
    DullGreyGuy Posts: 8,983
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    Did you buy the car with cash or is it on finance?

    Remember to inform your insurers of the change of owner, it is likely to result in higher premiums as not all insurers will allow you to insure a vehicle that you don't own. Alternatively cancel the policy and your company insurers it going forward but after 2 years you'll have lost your own NCD.

    There is a case in the Insurance forum here of someone who got mixed up with who owns the car/who its registered to and their £10,000 claim was declined and their personal insurance voided (declarable for life) because of the false declaration and that the insurer wouldn't have insured it had they made a truthful declaration. 
  • challengesahead
    challengesahead Posts: 42
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    edited 6 November 2023 at 5:11PM
    Thanks for the info. It was bought in cash.
    Once sold to company, can I still have my spouse(not linked with the company) as a second driver?
  • Grumpy_chap
    Grumpy_chap Posts: 14,361
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    So a letter saying the car was sold by Mr x to Ltd company Y on that date for £££££ amount would suffice as a proof ?
    Transferring that amount to personal account from ltd bank account as well and let my accountant know about it at the time of filing?
    I believe that would be adequate but, given you have an Accountant, why not ask them before rather than after the event?

    I am also unsure that you would make any overall financial gain by selling the (used) car to the Ltd so it is not clear what the motivation is in this change.  Again, your Accountant will be able to very quickly run the figures and advise on this.

    Thanks for the info. It was bought in cash.
    Once sold to company, can I still have my spouse(not linked with the company) as a second driver?
    This depends what rules the Ltd have stipulated in the company car policy.
  • DullGreyGuy
    DullGreyGuy Posts: 8,983
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    Thanks for the info. It was bought in cash.
    Once sold to company, can I still have my spouse(not linked with the company) as a second driver?
    Check the company policy on company car use, seeing as your the director you'll probably be the one writing it. 

    Secondary will be checking the insurance policy especially if the company insures it as it may be limited to employees
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