Capital allowances on transfer of business

Capital allowances on transfer of business

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I'm new to SA returns and unfortunately have reached the last adjustment and probably the most complicated - capital allowances - without leaving a lot of time to research.

The business I'm looking at ceased as a self employed business at 31/03/14 and transferred to limited company on 01/04/14. There is one asset I'm concerned about which has a material impact on the numbers - a van purchased in November 2013, for which I assumed the self employed business claimed AIA for, but now I'm thinking it was transferred to the new company at book value - cost less 4 months depreciation, so should we only be claiming capital allowances on that 4 month write down and not the whole cost under AIA? Trouble with that is I wonder next year whether the new business can treat it as an acquisition and claim the AIA on that book value or are the transferred assets not new and therefore have to sit in a pool and then nobody gets the benefit of the AIA?

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By qhas
31st Jan 2015 13:42

Capital allowances on transfer
Account for the balancing charge on the
Sch D comp and claim capital allowances on the limited co

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By User deleted
31st Jan 2015 19:37

?

No AIA (or WDA) in period of cessation.

And no AIA to the new limited company.

The sole trader can sell at whatever he wants to give the best tax result. Often this will be £nil, but will depend on the circumstances.

As an aside, what do you mean by claiming capital allowances on "4 month write down"? Capital allowances are based on cost and have nothing to do with depereciation, as your comment would suggest.

 

 

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By cazza3
31st Jan 2015 18:49

Thanks.
My comment was probably misleading - capital allowance would effectively be the difference between cost and transfer value 4 months later - obviously normal depreciation for that period would be replaced by a write down to market or other suitable transfer value

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By qhas
31st Jan 2015 19:21

Capital allowances
I am not sure you have understood BKD's comment. Not being rude but read it again carefully.

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By Tim Vane
31st Jan 2015 20:28

@OP

You are out of your depth. Please seek help from a professional. Your posts are riddled with so many misunderstandings that it is clear you are a long way from being correct on the return. I trust that you will have a qualified professional doing the company return too before you dump yourself in it even further.

Sorry if that seems harsh, but I'd be surprised if you'd even got close to the right figures on your return.

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By cazza3
31st Jan 2015 22:27

No need to be rude folks. This just needed a bit of research, which I have now done thanks. Not particularly complicated, just frustrating that the HMRC notes are so poor. I am a professional if you must know, I just don't get bogged down in personal tax very often so I was hoping for quick answers rather than insults from here. Got there in the end nevertheless

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By Tim Vane
31st Jan 2015 22:34

Ah yes of course. How silly of me not to assume you knew exactly what you were talking about.

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RLI
By lionofludesch
01st Feb 2015 09:11

Not sure

I'm not sure why laymen think they can come on here a few hours before the deadline, post half of the relevant information, ask us all to drop what we're doing so that we can give them free advice, which they can't be bothered to read properly, get the wrong end of the stick and complain that everyone's rude.

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By cazza3
01st Feb 2015 15:48

Re not sure
Oh dear. I've seen some useful stuff on here in the past and getting asked to do something last minute thought there was half a chance of a concise and informed answer. I was right about that but I didn't realise that the quality of subscriber varies wildly. Amazed that some of those calling themselves professionals have time to waste posting such unhelpful negativity. If you haven't got anything useful to say, go and have a moan elsewhere. This isn't really an appropriate forum for such junk

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Replying to kenny achampong:
Stepurhan
By stepurhan
02nd Feb 2015 09:07

Such junk

cazza3 wrote:
his isn't really an appropriate forum for such junk
If you are referring to mean-spirited abuse of those that have pointed out you are out of your depth, then you are quite correct. This is not an appropriate forum for such junk.

A little knowledge is a dangerous thing, and mistakes from lack of understanding can be costly. Seek help from someone who knows what they are doing, is often one of the most valuable pieces of advice going. If you can't handle getting it when you don't seem to know what you are doing, perhaps a free online forum is not the best platform for your queries.

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Replying to Ruddles:
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By cazza3
02nd Feb 2015 13:12

Re such junk

Couldn't agree more. Next time (if there ever is one!) I'll set the scene much more carefully - the very brief introduction and description perhaps indicated I knew nothing about the subject. Using a free online forum for advice in that scenario would be mad and if I had been looking for more than informal reassurance that my interpretations were correct, I'd have sought help elsewhere - after all, a £100 fine and a fee for advice could be a lot less painful than making a major error on a return.

I should have expected a bit of flak for posting something on SA on the deadline day when there are obviously a lot of frazzled people out there, however I just wasn't expecting this sort of forum to have so many who seem to be experts on everything and have nothing better to do than second guess what sort of person I am... I hope they never need an opinion on anything - oh of course they know it all, so that will never happen...

Anyway, enough said. Most of us have work to do...

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By qhas
01st Feb 2015 19:20

Why get so indignant ?
You got the free advice which you did not care to study

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RLI
By lionofludesch
02nd Feb 2015 13:32

The thing is .....

..... it wasn't all that difficult a question, was it ?

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