Hi
It is clear from CA27005 that a sole trader can claim AIA on an asset even if it was partly used for private use, with the AIA being restricted by an estimate of the personal element. I was wondering if anyone could tell me whether an adjustment to the capital allowance computation in future years is required if the personal element proportion significantly changes. I have trawled the HMRC manuals, as well as Ross Martin and Accounting Web, but have been unable to find anything definitive.
To me it would seem odd if any adjustment isn't required.
Thanks
Chris
Replies (5)
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If the pte use changes since the original year of claim then I think that it should be recorded year by year so that the private use of the asset over it's lifetime can be calculated. This will determine the add back if the asset is disposed and a Ball charge is created.