Ok - I am quite clear on what happens with asset disposal and the various accounts required in B/S and P&L.
Asset account/accumulated depreciation account/Bank/Gain or loss on disposal.
However, what happens when it comes to tax return (Ltd Company corp tax)??
The scenario is this - all previous assets fully claimed AIA including those disposed of. New assets purchased this year of £5K. Assets scrapped of £10k cost - £6K depreciation. So loss on disposal is £4k (assets scrapped rather than sold).
There is normal depreciation in the year of £8k which I will of course add back. I also intend to claim AIA on the new assets of £5k. What do I do with the loss on disposal? I expect that this is disallowed in the tax comp (I expect there is a 'Box' for this???). I am just not sure if I need to do anything with the general pool which is always reduced to zero with the AIA deduction.
I would be grateful to hear from those that have experience of this......thanks!
-- Edited by Count1314 on Tuesday 28th of March 2017 12:50:03 PM
I can't give you a box number, as I've never filled in a corporation tax return - other than in a exam.
On a sale, if there is a loss there is no realisable loss if capital allowances have been claimed.
If an asset is destroyed, lost or stolen - and the company has no insurance, or if the insurance company won't pay out for whatever reason, things are different.
Imagine a 'normal' business, a business which has traded for years, the amount of computers and fixtures and fittings they get through, if losses were realisable they would potentially have thousands upon thousands of losses to carry forward.
Should there be a gain on disposal it is entirely different.
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