What happens to the assets that are purchased for a sole Trader When the business closes?
If the business closes for trade and the owner now keeps all the assets for personal use do you have to transfer the current value to income or something?
If the owner takes over the asset that was still in use by the business then the disposal proceeds are deemed to be the market value of the asset (taken into the capital allowances computation as disposals).
There will be closing year balancing charges and balancing allowances to take into account before the capital allowances computation is closed off. (note that there are no WDA's, FYA's or AIA's in the final period, these are replaced with BC's and BA's).
Don't forget matters such as any brought forwards overlap profits from the opening periods of the business.
There are special closing year rules where closing losses can be carried back against trading profits, relieved against total income or relieved against chargeable gains in the last and preceding year.
Sorry, answered more than you question but there are other tax considerations that you should be aware of when someone is closing down their business so just thought that I would throw a few pointers in there for your further consideration.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
