Treatment of personal assets

The Magician

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.

reader

The Magician wrote: »

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.

Sole trader with tools/equipment already owned - I would take AIA at value of item only (or CA if preferred).