Capital Allowance treatment on disposal of fixed assets (due to damage)

[css_jay99]

Hi,

I wanted to know if there is any capital allowance adjustments that need to be made for :-
1) 2 year old Laptop purchase with full 100% CA given in year of purchase.
Laptop broke a couple of months ago
2) A fully depreciated laptop that has now given up the ghost. I did not claim full Capital allowance on this one ...just 25% .....


I was on the assumption that since assets need to be pooled then there is no way to make any Capital allowance adjustments in Tax computations or I am talking rubbish?


cheers

css_jay99

[Clare@InTouch]

You're right - if they are pooled and there's no proceeds then there's nothing you need to do. When you cease trading there's simply a balancing allowance or charge on the remains.

You may need to adjust in the accounts though, if you capitalised them when you bought them.

[Nixon Williams]

Hi,

I wanted to know if there is any capital allowance adjustments that need to be made for :-
1) 2 year old Laptop purchase with full 100% CA given in year of purchase.
Laptop broke a couple of months ago
2) A fully depreciated laptop that has now given up the ghost. I did not claim full Capital allowance on this one ...just 25% .....
css_jay99

1. No adjustment needed for your capital allowances, but if it sits as an asset on your balance sheet then you will need to write it off.

2. If it is fully depreciated (implying that this is a few years old), why have you only claimed 25% in capital allowances? The old rate a few years ago was 25% per annum, so it should have been mostly reclaimed in capital allowances.

However, if you have only claimed 25% then write it off the balance sheet and make a claim for the balancing allowance for the remaining 75% you did not claim.

Alan

[css_jay99]

thanks guys.

Alan,
regarding the fully depreciated laptop in (2), I did claim the yearly 25% CA so i guess no other action is needed



..... so comming to the company accounts side


1) For 2 year old laptop not fully depreciated
would i have to write off the written down value against p&l ?

i.e,
Credit cost to Fixed Asset A/c
Debit cost to Asset disposal A/c
--
credit accumulated depreciation to Depreciation A/c
Debit accumulated depreciation to Asset disposal A/c


where Asset disposal a/c will be a p&L Norminal account code


2) for a fully depreciated laptop
I take it that this will be purely a balance sheet transaction ?
i.e,
Credit cost to Fixed Asset A/c
Debit cost to Depreciation A/c


By the way, I am using Sage Instant accounts


cheers

[Nixon Williams]

thanks guys.

Alan,
regarding the fully depreciated laptop in (2), I did claim the yearly 25% CA so i guess no other action is needed

..... so comming to the company accounts side

1) For 2 year old laptop not fully depreciated
would i have to write off the written down value against p&l ?

i.e,
Credit cost to Fixed Asset A/c
Debit cost to Asset disposal A/c
--
credit accumulated depreciation to Depreciation A/c
Debit accumulated depreciation to Asset disposal A/c

You have the last two the wrong way around!

where Asset disposal a/c will be a p&L Norminal account code


2) for a fully depreciated laptop
I take it that this will be purely a balance sheet transaction ?
i.e,
Credit cost to Fixed Asset A/c
Debit cost to Depreciation A/c

Yes, assuming that the asset has been fully depreciated.

By the way, I am using Sage Instant accounts


cheers

Just a few adjustments.

[css_jay99]

--
credit accumulated depreciation to Depreciation A/c
Debit accumulated depreciation to Asset disposal A/c

You have the last two the wrong way around!
Just a few adjustments.

cheers , i see the error now