Capital allowances and insurance proceeds | AccountingWEB

Capital allowances and insurance proceeds


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!

There are 3 comments. Login or register to view them.

Forgive me sounding a bit dense...

Steve Kesby |
Steve Kesby's picture

Missed a point out...

TaxAssistant |

I think you had better ask the client don't you?

Chris Smail |
Chris Smail's picture