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Where Taxpayers and Advisers Meet

Capital allowances

Yiannis17
Posts: 85
Joined: Wed Aug 06, 2008 3:43 pm

Capital allowances

Postby Yiannis17 » Mon Jan 06, 2020 1:32 pm

Hi

I have a situation here where an expensive diesel car is in a special rate pool. The person is thinking of disposing of the car(used solely for business purposes) to purchase another one. The tax written down value is 60k and the first car will sell for 28k. My understanding is that unless the business ceases he cannot claim the 32k as an allowance? Am i correct?

Thank you

Jholm
Posts: 108
Joined: Mon Mar 11, 2019 4:22 pm

Re: Capital allowances

Postby Jholm » Mon Feb 17, 2020 3:36 pm

Surely the disposal proceeds go into the equation and a balancing allowance/charge arises? New car gets put into either the same or a new pool depending on the details of it.

robbob
Posts: 2994
Joined: Wed Aug 06, 2008 4:01 pm

Re: Capital allowances

Postby robbob » Tue Feb 18, 2020 9:28 am

Jholm
Surely the disposal proceeds go into the equation and a balancing allowance/charge arises? New car gets put into either the same or a new pool depending on the details of it.
Personally i wouldn't presume anything is correct in this regard - car rules are suitable quirky that even here (taxationweb!!) its probably too much head scratching to give the full correct chapter and verse answer without inducing a potential headache or making oneself look stupid.

Yiannis17
I have a situation here where an expensive diesel car is in a special rate pool.
When you say expensive car do you means its an expensive car bought pre 6/4/2019? (1/4/2009 if its a company) - if it is the case i wouldnt expect the car to be in the special rate pool.

If this is a post 5/4/2009 purchase and the car is simply sat in the special rate pool i am reasonably confident (but not certain) that no balancing allowance can be claimed unless the buisness ceases to trade - wda allowance will continue to be claimed on an ongoing basis.


Note if this had been a car within a sole trader business that had been used privately i think rather perversely the balancing allowance would have been claimable on a use it or lose it basis.
Note anything i have typed above could be wrong unfortuantely - hopefully if that is the case someone will be kind enough to correct me :)


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