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Small pools WDA question

We have a client who incorporated his business several years ago having previously traded as a sole trader.  He bought some assets into the business and AIA was not claimed because they assets came from a connected person.  We put the assets into their own asset pool (connected persons) and have claimed WDA at 18% pa.  The balance on the pool is now below £1,000.  Can the client claim the balance as small pools WDA now or does it have to go on in perpetuity at 18% pa? I have searched the HMRC website but no joy. Thanks.

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22nd Nov 2017 17:34

Why would you search the HMRC website? The legislation you need is in CAA 2001. I am unclear as to why the assets are not in the main pool. What provision of s54 caused them to be pooled separately and not in the main pool?

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By dlapish
to Tim Vane
23rd Nov 2017 22:29

Thanks for your answer. I suppose my question was to clarify whether assets purchased from a connected party were eligible for small pools write off, or not. I understood they were not but could not find a definitive answer. I will look at the reference you have provided.

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23rd Nov 2017 09:35

Once the pool is below £1000 you transfer it to the small pools pool with any other pools that are below £1000 and carry on claiming WDA at 18%, this way for all your small pools you have only one balance to carry forward.

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to Duggimon
23rd Nov 2017 10:46

Small pool write off only relates to the main pool and special rate pools. For any other pools, eg private use assets, the small pools write off won't work.

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to Duggimon
23rd Nov 2017 10:54

I'd not appreciated how this is supposed to work. Thank you.

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By mumpin
to Portia Nina Levin
23rd Nov 2017 14:15

This is an interesting thread. I thought that small pools didnt apply to assets obtained from a connected party. Previous threads about small pools on Any Answers have not acknowledged this.

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to mumpin
23rd Nov 2017 14:18

Is there something about the concept of a "pool" that is confusing to people perhaps?

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By DJKL
to Portia Nina Levin
23rd Nov 2017 14:26

It may have hidden depths.

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By Dib
to DJKL
23rd Nov 2017 15:59

Indeed, and people jumping in at the deep end without having a grasp of the legislation!

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By Ruddles
to Portia Nina Levin
24th Nov 2017 09:24

Funny - I don't detect any sarcasm there, Portia.

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By pumnoo
23rd Nov 2017 22:35

Legislation points out 2 provisions regarding small pool.

1) it is related to MP and SRP items of value less than £1000.
2) Small pool does not apply on single item pools.

Second point first.

As it describes if any asset which is held separately then this provision is not available such as private use cars or any assets used by sole trader or partnership outside the trade.

Now first point.

Law excludes SINGLE ASSET pool not a SEPARATE POOL. This means if you have pooled number of assets acquired from connected party and pooled separately for (say) convenience/clarity purpose, it will still be recognised as MP/SRP items.

Therefore there is no reason that the small pool provision not to be applied on it.

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to pumnoo
23rd Nov 2017 23:54

Well sure, if you just ignore the fact that the legislation prohibits it then you can just make up the rules as you go along.

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By pumnoo
to Tim Vane
24th Nov 2017 09:08

Please provide reference where it prohibits ?

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By Ruddles
to pumnoo
24th Nov 2017 09:22

s54(6)

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