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Small Pools Allowance Question

Small Pools Allowance Question

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Hi,

I would appreciate your help on this one.

Example: I filled in my first self-assessment tax return last year (2009/2010) and had an Annual Investment Allowance (AIA) of £700 for a machine.

Question 1: I guess this tax year (2010/2011) I bring the AIA from last year forward as a "main pool" of £700?

Question 2: Can I write the whole amount of £700 off as a Small Pools Allowance? If so, where do I put the £700? Does it go as a Capital Allowance, Balancing Charge or Allowance for small balance of unrelieved expenditure?

Question 3: If I have writen the £700 for that machine off as a Small Pools Allowance, what happens when I come to sell that machine?

Thank you.

Replies (4)

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By ACDWebb
08th Mar 2011 15:18

If

You had AIA last year there is nothing to carry forward to this. If you do and then claim a small pool deduction you have had the relief twice surely.

When you sell the proceeds come back into the pool (max £700) and give a balancing charge

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By Anonymous
08th Mar 2011 15:27

Balancing Charge

Thanks for your answer. So if I sell the item for £500, I would put down £500 as a Balancing Charge which will then add to my taxable income.

What if the item broke and went in the bin? Would I then have to put down the original £700 as a Balancing Charge?

Thank you.

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By ACDWebb
08th Mar 2011 16:05

If it broke and you binned it

then there are no proceeds and no balancing charge.

Bear in mind if you gave it away to a member of you family you would have to bring it in at its value at the time - which for a computer could be small with the pace of progress

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By Anonymous
08th Mar 2011 16:21

Right I understand, thank you for your help.

By the way if I did sell an asset how would I invoice this? Would I raise a regular invoice?

I've heard about raising an Asset Purchase Agreement but not sure if that applies to sole-traders?

Thank you.

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