Short answer
Yes. You incorporate, then transfer the trade, assets and goodwill to the company. Capital gains can arise on goodwill and assets, but incorporation relief or holdover relief often defers the charge where the conditions are met.
Company formation
Can I transfer my sole trader business into a limited company?
Yes, by incorporating the trade and transferring assets and goodwill. Incorporation relief, VAT transfer of a going concern and the practical steps.
Written and reviewed by Waqas Sagar Member of ICAEW, Fellow of ACCA, Fellow of AAT, a double graduate and entrepreneur at heart, helping startups grow and serving thousands of businesses nationwide with an excellent team. Published by LimitedCompany.Accountants, 12 London Road, Morden, London SM4 5BQ. Reviewed 12 September 2026 against 2026/27 UK rates and current Companies House and HMRC guidance.
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Yes. You incorporate, then transfer the trade, assets and goodwill to the company. Capital gains can arise on goodwill and assets, but incorporation relief or holdover relief often defers the charge where the conditions are met.
01
The tax mechanics
02
VAT, contracts and practicalities
The tax mechanics
Incorporation relief applies automatically where the whole business, other than cash, is transferred as a going concern in exchange for shares, deferring the gain into the base cost of those shares. Taking consideration as a loan account instead can trigger a gain but creates a balance you can draw tax free later, which is sometimes the better answer.
Capital allowances assets can be transferred at tax written down value by election, and stock is normally transferred at market value. The sole trade ceases, requiring a final Self Assessment with any overlap relief used.
VAT, contracts and practicalities
A transfer of a going concern is outside the scope of VAT where the conditions are met, and the VAT number can be transferred using form VAT68, though many businesses prefer a fresh registration to avoid inheriting history.
Reassign contracts, leases, insurance, domain names, bank mandates and supplier accounts to the company, and tell customers the invoicing entity has changed. Invoicing from the company while contracts remain in your own name causes disputes and bookkeeping problems.
Before you act
Rates, thresholds and deadlines quoted here reflect the 2026/27 UK position and current Companies House and HMRC guidance. Check GOV.UK, or ask us, before relying on them for your own company.
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We work with company directors across London and Surrey from our office at 12 London Road, Morden, London SM4 5BQ. Pick your area, or send the form below and we will call you back.
Frequently asked
Can I transfer my sole trader business into a limited company?: questions directors ask
Is goodwill relief available on incorporation?
Amortisation relief for goodwill acquired from a related party is heavily restricted, so do not assume the company gets a deduction.
When is the best time to incorporate?
Usually at the start of a new accounting period, with the sole trade ceasing cleanly on the day before.
Do I keep the same bank account?
No. The company needs its own account in its own name.
What records are needed for can i transfer my sole trader business into a limited company?
Keep bank statements, sales and platform reports, purchase invoices, payroll records, VAT workings, finance agreements and Companies House correspondence. We confirm the exact list at onboarding and identify gaps before a filing deadline becomes urgent.
How much does help with can i transfer my sole trader business into a limited company cost?
The fee depends on transaction volume, record quality, VAT and payroll requirements, historic catch-up and the level of reporting needed. We agree a fixed scope and price before technical work starts, with published packages available on our fees page.
Can you take over can i transfer my sole trader business into a limited company from another accountant?
Yes. We request professional clearance, collect the prior records and authorities, check the next Companies House and HMRC deadlines, and give you one clear handover list. The process is normally completed remotely.
Can can i transfer my sole trader business into a limited company be handled online?
Yes. We work through secure cloud records, scheduled reviews and digital approvals, while keeping a named team available by phone, video call and email. Clients can also visit our Morden office by appointment.
Which accounting software works best for can i transfer my sole trader business into a limited company?
We regularly work with Xero, QuickBooks, FreeAgent, Sage and connected sales or expense apps. The right setup depends on transaction volume, integrations and the reports you need, not simply the software brand.
What tax deadlines matter for can i transfer my sole trader business into a limited company?
The relevant calendar may include annual accounts, Corporation Tax payment and return dates, confirmation statements, VAT returns, payroll submissions and Self Assessment. We map the dates from your company year end and registrations.
Is this can i transfer my sole trader business into a limited company guidance personal tax advice?
No. This page explains general UK rules and common accounting treatment. Your facts, contracts and wider tax position must be reviewed before you rely on a conclusion.
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Check the current rules
Use official information as your reference point.
Deadlines, thresholds and filing rules change. GOV.UK and Companies House publish the current statutory position; advice should then be applied to your company’s circumstances.