Incorporation: Sale of "cash basis" expensed plant

[CashingOut]

I have been a sole trader for 2 years and elected from day 1 for the “cash basis” to apply. I am incorporating the business midway through Year 3 using the S165 route,
My business will cease in Year 3 and I am trying to work out what happens on the sale of the plant - a transfer between connected parties.
Normally, (ie without the cash basis applying), market value deemed proceeds would be the default but varied by an election under CAA 2001 s 266 for TWDV to be used.
But, in my case, as all the plant has been expensed under the cash basis there is no TWDV.
S96A ITTOIA 2005 at (2)(a) refers to bringing in as a trade receipt any proceeds from the disposal of an asset but I don’t know if this still applies to connected party disposals.
So my question is, can I sell my plant for £1 and bring in £1 as a trade receipt (and my new company have a £1 plant purchase) without making any form of election/claim?

[greybags1]

For capital allowance purposes the sale of plant between connected persons does not automatically dictate 'market value'.

On cessation (ie incorporation) the plant is deemed sold to the company for consideration equal to the lower of actual consideration and original cost. This will create a balancing adjustment. Whether it's an 'allowance' or a 'charge' depends on the amounts involved.

S266 merely allows connected persons via a joint election to transfer plant at TWDV to avoid any unnecessary balancing charges.

You are correct that since the cash basis has been used any deemed proceeds you have received must be included in trading income.