I have recently taken on a new client and am dealing with their transition from sole trader to limited company.
I am preparing their sole trader accounts to 31 March 2015 (cessation). As the limited company is taking over the sole trader business as a going concern, with the capital allowances, do I have to calculate the net book value in the normal way then carry it forward to the limited company, or do I have an option to put a value of the pool at cessation and transfer that figure instead?
The reason I ask is that the sole trader has a WDV B/F of £10k but the calculated value at cessation would be £6.5k, giving a balancing allowance of £3.5k, which is more favourable than carrying forward the NBV.
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AIA
You cannot claim AIA in the year of cessation as well so check your figures again.
You are correct but I tend to transfer the assets at WDV for tax purposes as it makes things simpler.