order of capital allowances
Which computation is correct? Where disposal proceeds are greater than the pool value i understand it gives rise to a balancing charge. But where there were additions in the year that would normally qualify for the AIA, I am not clear in what order you address it. You will see in the example below it makes a difference.
I can not find it listed on the HMRC
Pool B/fwd - nil
Additions - 438,000
Disposal- (368,000)
Total 70,000
WDA 20% 14,000
NBV 56,000
Total reliefs - £14,000
or
Additions 438,000
AIA (75,000)
Net 363,000
Disposals (368,000)
Bal Chrg 5,000
Total reliefs £70,000
Either is valid ...
... or anywhere in between.
You can partially (or wholly) disclaim the AIA.
That which is disclaimed goes into the pool.
If that which goes into the pool is sufficient to wipe out the balancing charge, you can also partially or wholly disclaim the WDA as well,
With kind regards
Clint Westwood