Readers' forum : Like father, like son

Our client is a sole trader who wishes to retire. His business has equipment that cost £150 000 of which £30 000 was acquired on hire purchase. The tax written down value for capital allowances is £70 000. The client’s son would like to take over the business. He is also a sole trader with his own business but cannot afford to buy the equipment. Nor is he VAT-registered. The father’s intention is to ‘give him the business’. The client and his wife are 50% shareholders in Family Ltd. This is a company that has been dormant for ten years but it still has a bank account open. There is no value in the company.

My proposal is that the parents sell the 100 £1 shares in Family Ltd to the son who will be appointed a director. The company will register for VAT and the father...