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Hi,
Just want to check one thing about balancing allowance.
I saw in a few exercises that when a car had written down value at the beginning of the tax year, and then was sold, sometimes there is a balancing allowance (and then balance of the main pool at the end of the tax year is 0), and sometimes the value of the disposal (lower of sales proceeds & original cost) is deducted from the opening balance of the main pool, and WDA applied at the remaining balance.
Could you please explain the difference?
Thank you in advance!
NinaIf the car is in the main pool because of it’s emissions then deduct it from the pool and there is unlikely to be a BA/BC in that case.
If the car is a private use asset by the owner then deduct the lower of the two amounts from the WDV b/fwd and calculate the BA/BC
Hope that helps
jill
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