Confusion On Chattels - Help
Celtic Angel
Registered Posts: 17 New contributor 🐸
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
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
0
Comments
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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.0
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