Treatment of personal assets

The MagicianThe Magician Feels At HomeRegistered Posts: 96
Hi guys,

Really hope you can help.

If a fixed asset was used in a personal capacity prior to being introduced into a sole trader business, is it correct that you cannot claim the AIA and the capital allowance is restricted to 20% of the WDA year on year?

And the asset is introduced at its market value?

Thanks so much.

Comments

  • readerreader Experienced Mentor MAAT, AAT Licensed Accountant Posts: 1,038
    Hi guys,

    Really hope you can help.

    If a fixed asset was used in a personal capacity prior to being introduced into a sole trader business, is it correct that you cannot claim the AIA and the capital allowance is restricted to 20% of the WDA year on year?

    And the asset is introduced at its market value?

    Thanks so much.

    Interesting question...................took a bit of digging but.........................

    In short, you treat the fixed asset as having been bought on the day the sole trade business started and claim AIA.

    (As an aside, I think you are only allowed to claim WDA's when transferring sole trade assets to a limited company or other business, S.266, CAA 2001).
  • T.C.T.C. Experienced Mentor Registered, Tutor Posts: 1,448
    Sole trader with tools/equipment already owned - I would take AIA at value of item only (or CA if preferred).
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