Capital Allowances

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in General accounting discussion
Partnership started 01.04.06 ceased 06.12.06 as one partner was useless and other partner bought him out. So then sole trader from 07.12.06 - 31.03.07.

Do I have to apportion capital allowances between the two periods or can I just do them at the end of the year?

This would benefit the sole trader but not the other partner - who doesn't deserve any help at all.

Is it as unethical as I suspect it probably would be, or are there are grounds for doing it only at the end of the year? If it helps at all, no depreciation has been included in the partnership accounts.....

Claudia

Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Capital Allowances

    Difficult one, but I would think that you should include capital allowances for the partnership and then start again for the sole proprietor. I would deal with them as two separate businesses. In effect, perhaps claiming capital allowances twice in that one year. What do other think on this?
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Capital Allowances

    Well as I understand it, capital allowances cannot be claimed in the period in which trade ceases so the assets will just be transfered to the sole trader at market value on 7th Dec and any difference between the original cost price and market value at 6th Dec claimed on the partnership return, then time apportioned capital allowances claimed for the sole trader.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Capital Allowances

    I'm with Jodie on this one.

    Kind regards
    Steve
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Capital Allowances

    Thanks you lot - I've now just to tinker with the figures (again!) and see what happens.

    Claudia

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