Capital Allowances

George

A person who has been claiming capital allowances on his car decides to give it away. There is a wdv c/f of £3250. Can anyone tell me the tax implications if he gives it away to 1) his wife 2) his partner?

Thanks for your help.

Monsoon

Treated as disposed of at market value (as wife/partner is a non arms-length transaction).

There is therefore a disposal amount in the CA comp of whatever the market value is at the time.

I recommend printing off a page from Autotrader or Parkers showing the approx value of that car at the time of disposal should HMRC inquire.

George

Hi Monsoon

Thank you! When I say partner, they just live together. Is this significant?

Thank you.

PGM

George wrote: »

Hi Monsoon

Thank you! When I say partner, they just live together. Is this significant?

Thank you.

No, either way its not an arms length transaction.

George

Thanks, PGM

It's the 'connected person' bit I'm puzzled about.

The CAA 2001 s575 talks about 'spouse' or 'civil partner' as connected persons. So does his partner (not civil partner) get the same treatment?

Thank you.

Monsoon

George wrote: »

Thanks, PGM

It's the 'connected person' bit I'm puzzled about.

The CAA 2001 s575 talks about 'spouse' or 'civil partner' as connected persons. So does his partner (not civil partner) get the same treatment?

Thank you.

If the act doesn't specifically apply to an 'informal' partner as a connected person, I am sure if it was sold at a reduced price, and HMRC challenged it and the taxpayer disagreed and it went to court, the judge would rule that the domestic partner was obviously connected and thus market rate should have been used.