Client limited company bought a vehicle on sep 10 from an individual who was going through bankruptcy, my client paid say £48,000 for vehicle which was taken on HP.
client year end is 31/12/10, we prepared and filed accounts by 31/3/11. client did not mention or we were not aware that any legal matters were outstanding therefore in may 2011, my client agreed settlement figure of £5000 to the trustee in bankruptcy.
we have the asset on accounts as £45k, further to this the vehicle has been disposed on 1/11/11 at £43k
i am not sure should the additional cost of £5k be shown as additions in y/e 31/12/11? and claim capital allowance (10%) and then do a disposal at nil value for this?
any comments or suggestions welcomed
thank you in advance