Commentary

V7.136 Input tax on goods or services before incorporation

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.136 Input tax on goods or services before incorporation

Part V7 Tax planning | Commentary

V7.136 Input tax on goods or services before incorporation

It is very common for a private individual to purchase an asset before he starts his business, and then to trade as a limited company when trading actually starts.

Again, there are rules that allow input tax to be reclaimed on pre-incorporation expenditure:

  1.  

    •     the person to whom the supply was made must become a member, officer or employee of the company and be reimbursed (or receive an undertaking to be reimbursed) by the company for the whole amount of the price paid for the goods or services

  2.  

    •     the person to

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