I have a higher rate tax partnership client y/e 30/9, wants to start trading under ltd co from 1/5/2013 (ltd co formed and currently dormant and has never been used)
So normal accounts for y/e 30/9/2012 assessable 2012/2013 and cessation accounts for 1/10/2012 to 30/4/2013 assessable 2013/2014
They desperately need a new van, if the van was purchased this week would it be eligible for AIA's (cost is under £25k & no other capital expenditure) or will it fall within no WDA, FYA and AIA's in final period of account 1/10/11 to 30/4/2013.
Trying to obtain maximum tax relief.
Been reading it over & over and at moment it is not sinking in.
Thanks
Replies (6)
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It doesn't matter what you claim...
... you'll get a balancing allowance or balancing charge, the net overall allowances will be the same.
The only thing that matters is the value that the assets get transferred to the company at, which will be dependent on whether or not the partnership and the company make an election under S.266 CAA 2001.
No you can make a claim
I see your point.
Yes. Because the period of accounts is longer than 18 months, you have to split it into a twelve month and seven month period (S.6(6) CAA 2001).
So as per your second calculation, you get a £20K AIA in the period to 30/9/12 and you would then get a balancing charge in the 7 month period to 30/4/12 of £20K, but you can elect under S.266 to transfer at the £0 wdv in order to avoid that balancing charge.
@george
are you saying that the deemd MV is £18k seems a bit high to me , would the BC bnot be equal to the MV of the van - i told you it was damp!
@carnmores
Yes. You're right, the BC should use market value, and I suspect the OP's £18K might be a bit high too.