Transfer of assets

[Herbs16]

Hi
My friend traded as a partnership, ceased, had capital allowances of £30,000 (equipment), these were transferred to his new Limited company at market value.

How do I calculate capital allowances please?

Disposal in partnership at £30,000 and purchase through Limited and claim AIA of £30,000?

Is that correct?
Thanks

[SteLacca]

When you say he had capital allowances of £30,000, do you mean that was the tax written down value?

In strictness, you should use MV for both the disposal (potential capital gains issues) and for the acquisition value by the company, and then claim AIA or CAs in the company based on that MV.

With regards to the partnership, he may also need to consider whether a balancing charge/balancing allowance arises.

[bd6759]

You should tell your friend to appoint an acountant.

The transfer can be at MV or WDV if both agree. AIA cannot be claimed on assests acquired form a connected person.