If an FHL is bought in 2013 for £190k, and section 199 was put in place in relation to the purchase of the fixtures and fittings worth £5k. Since then 18% writing down allowance has been claimed annually on the F&F resulting in a NPV of £2,700.
The FHL has now been sold, and a new s199 (or even s198) election is not been put in place with the new buyer, so the sale of the FHL property is equivalent to ‘cessation of trade’, so a balancing allowance can be taken.
The part I'm confused about is how these F&Fs are treated for capital gains tax calculations. A ‘disposal value’ (current NPV I think) must be surely entered in the tax computation... Am i correct that for CGT computation, the original purchase price must be £190k? Is the NPV balancing allowance claimed as a disposal cost?
TIA.
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