Corporation tax treatment for the donation of assets from the shareholders/directors

The shareholders/directors of our company donated two assets (other company's ordinary shares, second-handed car) to the company for free. As the company received the assets without paying for them, we plan to recognise the assets with corresponding entries to miscellaneous incomes (as no additional shares are issued, and the company will not make payments to the shareholders/directors in any future). Please kindly advise if this miscellaneous income is taxable or it is not taxable for corporation tax purpose. Our view is this income is not for the purpose of trade, and it isn't even non-trade income, so it may be outside scope of corporation tax charge.

Hi FK01434,

I am sorry, HMRC cannot provide accounting advice.
However, you may wish to engage the services of a third party or accountant to advise you on how to proceed with the qustion you has asked. 

Thank you.

 

Thank you for your comments. My question is not accounting treatment but Corporation tax treatment, if HMRC will charge Corporation Tax on asset gifted to the company. We view mere gift into the company is not trading purpose, therefore the company which received assets for free shall not be charged any Corporation Tax on the value of gift. Thank you.

Hi FK01434,
Thank you for coming back to us.
It is not possible for HMRC to give you advice on whether capital contributions made in this way would be taxable as income of the company or not.
If this contribution was made in exchange for shares this would be an injection of equity capital, and therefore would not normally be a trading receipt.
However, on the basis of your description this is not the case here, and it is possible that the correct treatment should be that this amount should be treated as taxable trading receipts.
If it is treated as miscellaneous income for accounting purposes, then it may also be chargeable by the income not otherwise charged rules in Chapter 8 of Part 10 of the Corporation Tax Act 2009.
Thank you.