exam 2 osborne book business tax

meibaker

hi, i am stuck on 1.1 on the exam2 of osborne book,
Q: mimmie ceased trading on 30/6/2009,she used a van owned by the business, 90% business use, she bought the van from the business for the market value of £9.500 on 30/6/2009, before she sold the business, she bought some plant for £8.000 on 1/8/2008, she sold all plant except van for £12.000 on 30/6/2009,all items were sold for less than they cost.
written down value at 1/7/2008 were; main pool, £1,000, van(90%busienss use) £10.000
my figures for the capital allwance is -2550? i know its wrong, but not sure where did i go wrong.please help

timgriff

Hi, haven't got the book in front of me (as i'm supposed to working lol) but i think you apply a balancing charge if disposal proceeds are higher than cost, and a balancing allowance if disposal proceeds are sold at a loss. So at a glance of your figures, it think it would be a £2500 balancing charge on the main pool (assuming the van is in the main pool which I think it should be).

Don't know if WDA would apply before the charge though?? And also unrelated but what about chargeable gains - i suppose that would come after adjusted profits?

Hope that helps, could be wrong though.

meibaker

hi timgriff thanks for your reply. just wish there are more explanation on the book about this problems! hope it won';t come up in the exam! lol