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In answer sheet of example 2, a disposed car is not under WDA(main). So the allowance figure is 4,200(balancing allowance figure)* 70%(business purpose).
However, a car Jane bought later is under WDA (special), so the allowance figure is asset (16,000) *8% (special)* 70% (business purpose).
Because they both are non pool assets, I am confused of the way to treat assets which are disposed of. Why it is not under WDA? And the concept of balancing allowance/charge is clearly is the opposite of capital allowance but where can we apply this?You need to look very carefully at section 7.1 of the OT notes that precede the example in which these issues are described – have you watched the lectures on this subject?
The note explains that when an asset is purchased that has private use by the proprietor it does NOT go into either the main or special rate pool and then a WDA (or AIA or FYA if applicable) is computed as normal – the £16,000 car was purchased during the period and has high emissions so an 8% WDA is applied.
The previous car used by Jane is sold during the period and therefore a balancing adjustment is computed on sale.
These points are all consistent with the notes in section 7.1 notes a, b and c.
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