When you sell or “dispose of” something you claimed capital allowance on, include the value in your calculations for the accounting period you sell it in.
Dispose of an asset
You can dispose of an asset if you
- Sell it
- Give it away as a gift or transfer it to someone else
- Swap it for something else
- Get compensation for it- like insurance payout if it’s been lost or destroyed
- Keep it, but no longer use it for your business
- start to use it outside your business
Work out the value
The value is usually how much you sold it for. use the market value (the amount you’d expect to sell it for) if you:
- Didn’t sell it, instead gave it away or you kept it but stopped using it for your business
- Sold it for less than it was worth to someone connected to you
if you originally claimed 100% of the item
add the full value to your profits in your tax return if both of the following apply:
- You originally claimed 100% of the item under annual investment allowance (AIA) or first-year allowance
- You have nothing in the pool of your items that qualifies for
if you have a balance in the pool your item qualifies for
Deduct the full value from that pool if you originally claimed 100% of the item and you have a balance in the pool your item qualifies for. Add the difference to your profits in your tax return if the value of the item is more than the amount in your pool. This is a “balancing charge”
If you sell it for more than it cost you
You can only deduct the original cost of the item even if you sell it for more, if a connected person sold it to you for less than it cost them, deduct ethier how much you sell it for or how much it cost them.
add the difference to your profits in your tax return if the value of the item is more than the amount in your pool. This is a balancing charge.
if you close your business in the year you close your business, enter a balancing allowance on your tax return instead of claiming capital allowances.