Corporation tax (in tax return CT600) when you sold VAN

meekate

Hi

Would like to ask about Corporation tax when you sold VAN.

Limited company year end 31 Dec every year.

If I brought van 2,000 on 1/1/2019 and depreciation 25% reducing balance
At 31/12/2019, I claimed this van full capital allowances 2,000 in company tax return CT600.


At 31/12/2020 van net book value was 1,125 and same days 31/12/2020 sold van for 2,000.
So, Gain on sale of this van in year end account is 875.

Question>>>
How much ***corporation tax (in tax return CT600)*** need to pay for Gain on sale of this VAN?

Is it 875*19% or 2000*19%?

Thank you very much in advance.
K

meekate

Got answer that I confused



You paid £2000, you got a £2000 allowance.

You got £2000, you get taxed on £2000.

All very logical.

By lionofludesch

Thank you so much

douglasstroud

I agree with Lion

Jagz1234

It depends on what is already in your capital allowance gen pool.

You put the disposal in for £2K.

If you have no other assets in the pool, the £2K is treated as proceeds and is taxable. There is no gain, its a balancing charge.

If you have other assets in the pool, assuming the WDV exceeds £2,000 then it will reduce the WDA in the year.

It is not as simple as you have tried to sumamrise, unless you only the van in the gen pool and no other WDA available in the year.

douglasstroud

It is that simple because the OP only asked about the C/Tax that would be due on the disposal of the van which has been answered, so no need to complicate matters.