Capital allowances and AIA on equipment to replace stolen

Capital allowances and AIA on equipment to...

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A self-employed photographer has just had most of his still-operational equipment stolen. Assuming: 20% writing down pool vaulue of £4k, insurance payout of £7k (some of which is replacing items bought more recently where AIA is claimed). and new purchases of £12k.

How would you treat the insurance payout, which may well not be itemised? Should it all be set off against the new purchases, or can some be offset against the pool?

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Euan's picture
By Euan MacLennan
01st Jul 2011 17:39

What is the problem?

The insurance payout of £7K is the sale proceeds of the old equipment, which should be deducted from the b/f balance of the CA pool, giving you a balancing charge of £3K with an AIA of £12K on the new equipment.

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By Mouse007
02nd Jul 2011 23:40

Bingo

Which is exactly what we just did for client in same position.

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