Hi
An asset sustained fire damage, the client received insurance proceeds but later decided to sell the asset. I need to determine what would influence the capital allowances position of this event and questions I need to ask the client.
I understand that permanent loss or destruction triggers a disposal event for CA's at the date the asset was lost and disposal to a third party. But I am I right in thinking that this would trigger two disposals? Then would the new asset be treated as an addition? If the insurance proceeds were not used in repairing or buying a new asset does that lead to a different treatment for CA purposes?
Any thought's would be helpful. I can't seem to find anything!
Many thanks!
Replies (3)
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Forgive me sounding a bit dense...
... but if the asset was destroyed, how did it come to be sold?
I'd say that your disposal event was a sale within item 1 of the table in S.61(2) CAA 2001.
If you think you've genuinely got two disposal events, then read S.60(3).
I think you had better ask the client don't you?
You seem to be lacking facts rather then knowledge of the law.