We have a client who is in the haulage business. He currently operates as a sole trader but based on his turnover of circa €200k he wants to go ahead and become a limited company.
Our query concerns his assets. 2 x Trucks worth about €80k in total and how best to handle these. He is reluctant to sell them to the company for fear that if the worst happens and the company folds he will lose the trucks.
He is a single man and wants to take a salary from the company of €600 per week after tax through payroll. So if he leases the trucks as a sole trader to the company which he says would have to be €1,500 per month or €18,000 per year to cover loans he would end up with quite a heavy Income Tax Liability.
Is there any more tax efficient way to handle these assets and could you please advise what this is?