exam 2 osborne book business tax

meibakermeibaker Trusted RegularPosts: 481Registered
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

Comments

  • timgrifftimgriff Feels At Home Posts: 55Registered
    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.
  • meibakermeibaker Trusted Regular Posts: 481Registered
    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
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