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Dear sir I would be grateful if you could help me on the last part where allowance for the car which was sold has been calculated as follows: 8% of 3272 = £262
According to me, the car has been disposed and the thermal insulation is completely allowed under AIA. So, there has been no other transaction under the special Rate column except for the disposal of the car.
Shouldn’t there be a balance allowance instead? Which is £3272 instead of $262?
I Thank you in anticipation for your assistance.
A balancing allowance only arises on a pool when the business ceases to trade NOT when the assets constituting the pool have all been sold. The only other time you would see a “bancing allowance” would be on a small pools WDA claim.
Dear Sir, I thank you very much for your fast response. Ok, so does this include non-pool assets (eg car for partial private use) or short-life assets (eg photocopy machine). I refer to examples 2 and 3 on pages 35 and 36 respectively where I see a balance allowance when the non-pool assets have been disposed.
As stated the balancing allowance only arises on a pool on cessation of trading whereas if a non pool asset is sold a balancing allowance or charge will indeed immediately arise.
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