An asset sustained fire damage, the client received insurance proceeds but later decided to sell the asset. I need to determine what would influence the capital allowances position of this event and questions I need to ask the client.
I understand that permanent loss or destruction triggers a disposal event for CA's at the date the asset was lost and disposal to a third party. But I am I right in thinking that this would trigger two disposals? Then would the new asset be treated as an addition? If the insurance proceeds were not used in repairing or buying a new asset does that lead to a different treatment for CA purposes?
Any thought's would be helpful. I can't seem to find anything!