An asset which qualifies for capital allowances as plant and machinery is disposed of in the same accounting period that is was acquired. Obviously it therefore does not receive WDA/FYA, but does it still qualify for AIA? My gut instict says no, but I can find nothing in the legislation that says it does not.
Replies (7)
Please login or register to join the discussion.
AIA
I'm also interested to know the answer to this one, I couldn't find anything concrete one way or the other either.
aia & balancing allowance
surely it would be buy asset for £1,000 sell it for £500 - balancing allowance £500
I suppose it gets tricky if you sell it a profit which implies it's been traded
Ta Nick
Thanks, that was my gut feeling too, effectively claim whatever the difference is. Seems the logical solution (but then tax rules and logic aren't always best of friends)
Why?
Why would you elect for SLA treatment when you could claim AIA and suffer a reduced WDA?
Why if you dispose of an asset would you not get WDA/FYA in respect of the original expenditure. The disposal just means that you have to bring a disposal value into account. Allowances are given in respect of qualifying expenditure not assets.
As you can't find where in the legislation it says that you can't get AIA in respect of the expenditure on an asset that is disposed in the same period, where does it say in the legislation that you can't get an FYA in respect of expenditure on an asset that is disposed of in the same period.
To qualify for AIA/FYA the asset on which the expenditure was incurred must have been owned at some time in the period.
Sale of low emission cars
The same applies to the sale of low emission cars which were acquired in the same accounting period - I can't find anything to suggest that I cannot claim a 100% FYA on the cost, just because I sell it in the same accounting period....