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Dear Tutor,
We calculate the Capital gain but not a capital loss when a Plant and machinery is disposed on which capital allowance had been claimed, the reason I understand is because while calculating the capital allowance we used disposal value but only to the maximum limit of the original cost of the asset. The excess of disposal value over the cost i.e. the profit is therefore accounted for by calculating the Capital gains.
My question is do we need to calculate the Capital gains even for Non-pool assets?Your statement is exactly right and although it is very unlikely that an item of plant and machinery would ever be sold for more than original cost a gain would be computed on any item other than those that cost and are valued at less than £6,000 and are therefore covered by the chattel exemption.
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