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WakwakStudios(Newbie)Newbie
5 Jan 2024

Hi there, my partner has transitioned her business from a sole trader to a company. She's the sole director/owner and the purpose of the transition was mainly for liability protection. The sole trader will be shut down. She has a car that is used solely for business and her accountant is asking her to transfer the vehicle over to the company.


This will incur a massive duty bill (Almost $4k) just to move the car from one entity over to the other, despite being owned by the same person, and used in entirely the same manner. What options does she have and can she gift or sell the car to "herself" at a token value?

3,530 views
2 replies
3,530 views
2 replies

Most helpful response

Most helpful reply

YEP(Devotee)Devotee
5 Jan 2024

@WakwakStudios


Your partner may be a director and shareholder of the company, but they are still two seperate legal entities. This means that your partner will no longer be the legal owner of the car, so the car will not be "owned by the same person" anymore.


You will need to contact the Department of Transport in your state or territory to work out what can be done in relation to the duty that will have to be paid, but most departments use the purchase price of the vehicle or the market value which ever is the higher when calculating duty. "gifting or nominal value" is never acceptable to them.


The company was set up for a reason, so you may as well do it properly the first time, afterall that is why you have an accountant.


If your not sure why the accountant wants to do something or you want to do it a different way the best thing to do is ask the accountant as they are in the better position to assist as they have personal knowledge and expertise in what your partner has set up.



All replies

Most helpful reply

YEP(Devotee)Devotee
5 Jan 2024

@WakwakStudios


Your partner may be a director and shareholder of the company, but they are still two seperate legal entities. This means that your partner will no longer be the legal owner of the car, so the car will not be "owned by the same person" anymore.


You will need to contact the Department of Transport in your state or territory to work out what can be done in relation to the duty that will have to be paid, but most departments use the purchase price of the vehicle or the market value which ever is the higher when calculating duty. "gifting or nominal value" is never acceptable to them.


The company was set up for a reason, so you may as well do it properly the first time, afterall that is why you have an accountant.


If your not sure why the accountant wants to do something or you want to do it a different way the best thing to do is ask the accountant as they are in the better position to assist as they have personal knowledge and expertise in what your partner has set up.



HannaTax(Enthusiast)Enthusiast
7 Jan 2024

Just to add to this, when you transfer ownership of an asset between associated businesses for a value less than market value, GST still needs to paid at market value.


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Transferring a car from sole trader to company. Same single owner/director | ATO Community