A limited company has ceasing trading, it's assets are worthless and so have been written down from £5k to zero. Is this £5k now a balancing allowance forming part of the trading loss that can be carried back and offset against prior period profits as a terminal loss?
Many thanks
Replies (5)
Please login or register to join the discussion.
Cessation of trade
Whether there is an allowance for tax will depend on whether capital allowances have already been claimed. With the Annual Investment Allowance, and claiming the balance of small pools over the last couple of years, there may well not be a written down value brought forward in the tax computaion.
-- Marion
Good point, Marion
I was assuming from the OP's mention of "balancing allowance" that the £5k was the balance b/fwd on the CA pool. If it was the NBV in the accounts, the £5k loss on disposal in the cessation accounts will be added back in the tax computation and replaced with whatever the balance b/fwd on the CA pool may be.