Annual investment allowance on business ceasing

AIA on van a self employed client has sold to his new company

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Good afternoon,

I would really appreciate some clarification on the following situation I have with a client - any advice will be greatefully received.

The client bought a van for £14,000 3 years ago and his accountant at the time claimed the whole lot as AIA and he received a tax refund for that year 2014/15 (and also had a tax investigation, but that is by the by!)

I took him on for 2015/16 and just put his depreciation through his accounts, obviously the van was not included on the tax return.

The client has since set up a limited company with his colleage and as such ceased trading as self employed at 31.12.16. He wanted to transfer his van to the Ltd co at a cost of £9,000.

So for his tax return 2016/17 as self employed, should the £9,000 go back in as a balancing charge as he already had the tax benefit? This is going to give him a big tax bill especially as he was only self employed for 9 months, but clearly if this is the right treatment than it is what it is.

I suppose I just want to check that this is reasonable and I have not missed anything. 

Many thanks in advance,


Replies (2)

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By acty
10th Oct 2017 13:19

S266 CAA 2001

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By Lottie1
10th Oct 2017 13:41

Thanks acty that's brilliant.

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