I need a bit of help with an Annual Investment Allowance query.
I have a client who purchased a van in 06/07 for £7800 and they claimed £3900 as AIA in that year. The following year they claimed £975 (25% of £3900. Since then they have not claimed anything, but still owned the van.
In the year 11/12 they bought a new van for £10200 with part exchange on the old van of £3000.
In summary
2006/07
Cost of van 7800.00
Less Claimed AIA 3900.00
3900.00
2007/08
Less Claimed 25% 975.00
Balance 2925.00
2008/09, 2009/10, 2010/11
Less Claimed 0.00
Balance 2925.00
2011/12
Add new expenditure 10200.00
Less Disposal Proceeds 3000.00
Balance 10125.00
So after all of this, my question is, how do I deal with the balance of £10125, does it all go as AIA
The £3,000 disposal proceeds should come off the general pool. If this only contains the original van, then you'll end up with a balancing charge of £75.
That leaves the new van (£10,200), on which the annual investment allowance can be claimed.
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Pearce & Co - Chartered Accountant and Chartered Tax Adviser
