Capital Allowances

George
George Feels At HomeRegistered Posts: 43
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.

Comments

  • Monsoon
    Monsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    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
    George Feels At Home Registered Posts: 43
    Hi Monsoon

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

    Thank you.
  • PGM
    PGM Font Of All Knowledge Registered Posts: 1,954
    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
    George Feels At Home Registered Posts: 43
    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
    Monsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    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.
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