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Can you claim AIA on asset you bought and sold in same year?

Can you claim AIA on asset you bought and sold...

Hi everyone,

I am preparing the accounts for a company who bought a Macbook in January, depreciated it for one month and then at the end of the month they sold it to a company under common control for 20% of its value.

I am preparing the corp tax return and wondered if I can claim AIA for the macbook - I am presuming that I cannot however I have read through the HMRC guide and can't find this information anywhere. Does anyone know how to treat this for capital allowances?

I presume that I would also add back the loss on the sale of the asset as well?

I am a frequent viewer of the any answers section but this is my first time posting - so thanks everyone in advance!

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26th Feb 2016 15:30

No

you can't claim AIA

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26th Feb 2016 15:37

No

And it's a no from me, I'm afraid.

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By mely
26th Feb 2016 16:09

Yes

I'm going to say you can simply because I can't think of any legislation that says you can't. But I'm prepared to be corrected.

Late edit: I'm referring to the first company claiming AIA, that's how I read the question but I agree with Ruddles, and probably everyone else, the second company can't.

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By JimFerd
26th Feb 2016 15:53

There are various bits of anti avoidance, but it would depend on the arrangement.

I'm sure if the transferee company couldn't otherwise claim AIA, and the intention was always for that company to get the macbook - it could be caught. I very much doubt that this is the case here though, given the very small amounts.

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By Ruddles
26th Feb 2016 15:54

Yes and no

The first company can claim AIA, the second one can't.

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27th Feb 2016 15:53

Sorry, I've misread this question.   I was thinking the first company had ceased trading.

I agree with Ruddles.

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By Ruddles
27th Feb 2016 17:47

But you could be right, Lion!

You assumed that the first company had ceased, I assumed that it continued. In absence of relevant information (yet again) either assumption is reasonable.

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27th Feb 2016 18:11

True

But I think you're right.

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27th Feb 2016 18:11

Separate transactions

The first purchase will qualify for AIA if it meets the criteria. Was it actually used in the business as opposed to merely being depreciated?

The disposal proceeds then go in the general pool as a disposal.

You make the normal add-backs to the P & L.

The new owner, if connected for this purpose, can only claim wda.

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