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Capital Allowances for assets already owned

Hi,

I registered as a sole-trader in August 2010. Prior to this date I already owned two computers which are now used for business purposes. From what I gather, even though they were bought before the business began, I can bring these items into my business as fixed assets and claim 100% FYA Capital Allowances on their market value circa August 2010?

How do I work out the market value on such items - is there a calculation/percentage of the original cost which is commonly used to determine market value? Or is a rough figure based on: "what I would have got for them if I sold them on eBay" sort of thing acceptable?

Any guidance on this would be much appreciated.

Frank

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By blok
13th May 2011 09:09

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Market value at date introduced into business.  No FYA or AIA, just 20% WDA. 

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13th May 2011 09:52

Any reasonable value

 But keep a print of what you use to justify the value.

As above only WDA available as not new

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13th May 2011 10:56

but....

if market value is greater than the actual expenditure then it is actual expenditure that is used (s13(4) CAA 2001)

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By DMGbus
13th May 2011 13:46

Circumstances where AIA OK; VAT

The Annual Investment Alowance (AIA) could be claimed if the assets concerned were bought specifically for the business and not used until the business started - they are then pre-trading business fixed asset expenditure as opposed items bought for personal purposes, used as such and then subsequently brought into the business.

One other thing : VAT - if you are VAT registered then in some circumstances you can recover VAT paid on the assets concerned.

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13th May 2011 18:43

Main Pool Value = below £1000...

 Thanks for all the replies - very helpful. But am I right in thinking that if the main pool's total value (which these items would go into) is less than £1000 then they can be written off completely and the 20% WDA doesn't come into it?

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16th May 2011 12:56

Write off the 20% first

Frank, write off the 20% first and then the resulting balance, if under £1,000 can be writen off in full in the same year.

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By blok
16th May 2011 13:03

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Just goes to show you how many interesting points there are on one fairly simple question!!

 

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16th May 2011 13:09

Write off the 20% first

Frank, write off the 20% first and then the resulting balance, if under £1,000 can be writen off in full in the same year.

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16th May 2011 15:29

thanks rockallj

That sounds sensible; think I'll go with that.

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20th May 2011 10:57

I hadnt appreciated the £1k write off in the same year

If the 20% WDA in any year brings the WDV below £1k can I write off the balance in the same year?  I hadn't appreciated that - I have been hanging on until the following year.  Presumably the same for Ltd companies?

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20th May 2011 11:20

Incorrect treatment

Ian, your understanding was correct.  The write off of a pool under £1,000 is itself a WDA and you can't have two WDAs in respect of the same pool in the same accounting/basis period.  See http://www.hmrc.gov.uk/manuals/camanual/CA23225.htm

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20th May 2011 21:59

Assets intro by a related party

Isn't the point that the assets are introduced by a related party, not that they are second hand (the reason why AIA cannot be claimed.)

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