Disposal of Fixed Assets

[faith77]

Need advice! Is profit/loss of Motor vehicle allowable or disallowable from Taxable profits?

Thanks:redface:

[bluewednesday]

It's disallowable as there will be a capital allowance balancing charge or allowance instead.

[Acid]

make sure that you know if motor vechicle is for personal or business use. That will effect its treatment.

[KARATEGIRL]

Just treat any profit or loss the same as you would the depreciation charge and add it back to the profit on the tax comoutatiom.

[Annie]

Hi Faith

Capital allowances for motor cars are determined according to the following categories:

1. Cars costing 12000 or less
2. Cars costing more than 12000
3. Low emission cars, regardless of cost

1. Cars costing 12000 or less go into the general pool and wDA of 25% p.a. is available but FYA is not available
2. Cars costing more than 12000 are termed expensive cars and are shown in a separate column. EDA of 25% p.a. anum is available but is restricted to a maximum of 3000. FYA is not available.
3.Low emission cars are cars with emission rate of 120g/km or less or are electrically propelled car. They are eligible for 100% FYA

When the disposal is from general pool or expensive pool and the disposal proceeds are more than the written down value of the car then there is a balancing charge which is added to tax adjusted trading profits

When the disposal proceeds are less than the written down value of the car then there is a balancing allowances which is deducted from tax adjusted trading profits

However for F6, balancing charge and balancing allowances will not be examined as mentioned in the Finance Act 2007