CT600 claiming capital allowances/capital losses

[jonbirch]

Hi

This is my first post and I thank you in advance for any opinion you can offer.

I am going to strike off my company, I have completed the accounts and am now completing the CT600.

There are £1200 worth of assets in the general pool (none of which purchased in the last year so AIA is not applicable). The assets have a value of around £700.

If I sell the assets for £700 can I write down the remainder as a capital allowance or should I write down a yearly capital allowance of 20% of the £1200 and the remainder as a capital loss?

I think it is probably the latter, if it is, is there anyway I can get any tax relief on this capital loss in the future?

Many thanks for looking.

Jon

[Incredulum]

Was this a trading company?

If so, the value of the fixed assets should have been brought into the pool on the day the company ceased trading; the balancing allowance utilised against final year trading profits/carried back to previous years. (I would need to check the current situation as I haven't checked on this for a few years, but you used to be able to carry back losses three years on cessation.)

If this was not how you treated the final trading computation, you need to resubmit it, if in time.

You do not get capital losses/capital gains on plant and machinery.

[jonbirch]

Hi Incredulum, thanks for your response.

Yes it was a trading company.

The accounts allow for depreciation down to the current value so I believe they are correct, it was just the CT600 I was unsure about.

So if I understand you correctly I can claim a capital/balancing allowance of the difference between the current value and the amount left in the pool.

So capital gains/losses if just for items such as property and other assets likely to appreciate?

Thanks again.

Jon

[Incredulum]

1. What date did you cease trading?

2. To what date do you draw up your accounts?

[jonbirch]

End of year 30th June, ceased trading 30th June

[Incredulum]

Fine. I am assuming that the cessation date is 30 June 2010 and you are preparing final accounts to that date also.

So on the cessation date you bring into the pool the value of your remaining assets. Any difference between the pool and the asset value gives rise to a balancing charge or allowance.


Plant and machinery can never give rise to a capital gain (in your case a gain chargeable to corporation tax). It can however give rise to a balancing charge. The reason being that plant would almost certainly give rise to a capital loss, and HMRC would not want to give you a capital loss on the depreciation of your privately owned Mercedes.

[jonbirch]

Thanks very much for taking the time to go through this with me, very grateful!

So to confirm, On the CT600 I can claim a capital allowance of £500 (the difference between the £1200 in the pool and the £700 value).

Thanks

Jon

[Incredulum]

yes.

[jonbirch]

Again, many thanks!