Capital allowances where Ltd company ceases trading

Capital allowances where Ltd company ceases...

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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

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Euan's picture
By Euan MacLennan
05th Jul 2011 21:55

Yes

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By Marion Hayes
06th Jul 2011 08:22

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

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Euan's picture
By Euan MacLennan
06th Jul 2011 10:20

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.

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By lizcraig
06th Jul 2011 16:09

Capital allowances where Ltd company ceases trading

The balance of £5k is a WDV brought forward, the balance sheet value to write off is £3k and I will be adding that back.

Thank you very much for your answers.

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By Marion Hayes
06th Jul 2011 17:06

Thanks Euan

We all see the questions a different way don't we -

-- Marion

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