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finance lease

totaally confused

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cleint has had a finance lease which has come to end and they have retained the asset

they have been given a credit note for rental rebate and a purchase invoice for the asset that contra each other out, no money has changed hands apart from an admin fee

I cant get my head around whats needed, the asset has been on balance sheet with depreciation allowable and this is fully written down

can we claim capital allowances on the repurchase?

thanks in advance

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By TheNovice
22nd Jan 2022 10:24

Crouchy wrote:

cleint has had a finance lease which has come to end and they have retained the asset

they have been given a credit note for rental rebate and a purchase invoice for the asset that contra each other out, no money has changed hands apart from an admin fee

I cant get my head around whats needed, the asset has been on balance sheet with depreciation allowable and this is fully written down

can we claim capital allowances on the repurchase?

thanks in advance

If you have claimed capital allowances on the original purchase then logically it cannot be claimed twice.

If the asset was obtained under a finance agreement then allowances could/should have been claimed on the inception of the lease agreement for the value of the asset. The funding/financing of this asset would be somewhat irrelevant for CAs and the finance cost associated with it would be expensed in the P&L.

If the allowances were missed you will not now be able to claim AIA (assuming AIA'able) but you can still claim the WDA.

I'd be inclined to ignore the invoices that contra each other out.

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By Catherine Newman
22nd Jan 2022 17:41

I hope your client isn't VAT registered.

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By Truthsayer
24th Jan 2022 11:56

'the asset has been on balance sheet with depreciation allowable'

Depreciation allowable??!! What did you actually intend to say?

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