Readers' forum : Company car plan

My clients are a husband and wife who have each traded through a limited company. In case it is relevant some of the income of the wife’s company is derived from work carried out for the husband’s company. The couple are winding down their businesses but the husband’s continues to trade and the wife’s still performs some work.

The wife needs a new car and I wonder whether it would be advantageous to buy this through the company? It seems to me that we could make sure that the wife’s dividend income could be adjusted as and when pension income starts to be received so that total income including car benefit remains below the personal allowance. The plan was that the car costs could be paid out of the company’s taxable income without incurring a benefit-in-kind tax charge on the wife.

Of course the husband...