Home For AAT student members AQ 2013 AAT Level 4 (Level 8 in Scotland)

Confusion On Chattels - Help

Celtic AngelCeltic Angel Settling In NicelyRegistered Posts: 17
Hi

Can someone clear up whether the £6000 adjustment on chattels is still relevant if the item was purchased for more than £6k. We've been taught in class that the £6000 deduction is done regardless of the purchase price, but the BPP books are only showing the £6K adjustment when the purchase price is less than £6K. This is a question for a fellow student who hans't access to the web - any help would be much appreciated.

V

Comments

  • mehmetmehmet Well-Known Registered Posts: 113
    The chattel rules (as covered in HelpSheet 293 are:

    CHATTELS SOLD AT A GAIN
    If the disposal proceeds are less than £6,000, then no gain is to be calculated.

    If disposal proceeds are greater than £6,000,then gain(before taper relief) is the lower of
    Disposal proceeds less cost less expenses less indexation, or
    5/3's of the amount by which disposal proceeds exceed £6,000

    CHATTELS SOLD AT A LOSS

    If the purchase price was more than £6,000 and the disposal proceeds are more than £6,000, then no adjustment is made and you can claim the full loss.

    If the purchase price was more than £6,000, but the disposal proceeds are less than £6,000, then the loss is restricted by treating the disposal proceeds as £6,000.

    I hope this clears things up for your friend.
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