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#1 04-01-17 10:53:42

Nisha Naz
Member
Registered: 04-01-17
Posts: 1

Sold cars...taxation

Hello posting first time. So I started own business in Dec 13, bought a car for £13,704 on hire purchase 3 years. I then claimed 100% capital allowance(I.e. £11,895 which is the capital amount no interest included) in tax year 13-14 along with the monthly interest of 4 months as expense. Next yr in 14-15 claimed the interest again for 12 months. Now in Nov 15 ceased the business due to Life long illness. car's market value then was £5000.  Car is since being used for private purposes. Just finished paying off all instalments in Nov 16.
My questions are 1. Did I claim right for past two years?
2. How to adjust the values this tax years?
3. Will I have to pay tax on the amount of market value
Thnkx in advance

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04-01-17 10:53:42

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Re: Sold cars...taxation



#2 04-01-17 20:56:59

Mentor
Verified Member
Registered: 22-10-05
Posts: 382

Re: Sold cars...taxation

You seem to have acted correctly in the past 2 years. The market value of the car at November 15 of £5000 needs to be offset against the capital allowance previously claimed. You have in effect sold the car out of the business to yourself to use privately and so the £5000 "you bought it for" from the business is taxable as a gain in the tax year 15/16. If you wound up the business in November 15 and were still paying finance on the car until November 16 then you can deduct the finance that was still owing as of November 15 from the £5000 and only allow for what is left as the offset amount.

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