Client is a company that has bought several ridicuously expensive cars in the hope of selling for a profit in years to come. No income generation but there are annual costs of maintenance, insurance, storage etc. and the usual accountancy fees, office costs etc. The cars are only periodically started and driven round the block to make sure they don't sieze up. The company will therefore only ever generate a loss, until such time as the cars are sold. My questions are:
1. How do I treat the on-going costs relating to the cars in the corporation tax computation? Do I disallow them so they are not carried forward? Would they ever be relievable if they were carried forward, assuming the company started another activity? Assume post 1/4/17.
2. When the cars are evertually sold (obviously no capital allowances have been claimed), will there be corporation tax on the chargeable gain or will the gain be exempt as disposal of a wasting assets?
Many thanks in advance.