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What are the deemed proceeds?

Hi Everybody,

I'm having a 'blonde' moment!!

I have a client who is a private hire driver and he has been claiming capital allowances on his car. At the beginning of the 2011/12 tax year has a WDV of around £6000.

During the year he gave the car to his girlfriend (and transferred logbook etc.) for free and rented a car for the remainder of the year.

Obviously there is a disposal to be dealt with, but do I claim the remaining balancing allowance of £6,000 seeing as the proceeds are nil?

Or is there a problem due to the car being given to his girlfriend? My gut feeling is that I need to deem the proceeds at market value or WDV???

Any answers would be appreciated.

Thanks in advance

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19th Apr 2012 13:38

Market value

He has withdrawn the car from the business and this can only be done at market value. Google "Parkers" for a guide to market value.

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By rjh1983
19th Apr 2012 13:55

Thanks

Thank you for your help.

It's much appreciated.

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Agree with Phil, unless...

... he operates as a limited company.  In that case, the proceeds are nil for the CAs comp, but there's a BIK on the client for the market value transferred.

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By rjh1983
19th Apr 2012 14:04

Sole Trader

No, he's a sole trader, but thanks for the insight. 

Much appreciated.

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19th Apr 2012 14:27

thought that was implicit

in the wording of the question.

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