Tax return and loss of Business Equipment

andycuk

Hi

Hoping some on maybe able to assist me.

Ran a SB that had inflatables during tax year 2010 2011 ( in July ) we had a fire in our lorry whilst driving and lost everything we owned. We were not insured for fire on equipment (just PL and Theft) and the lorry was third party only. So a told loss.

Compling my tax return to cease trading and wondering how to record the loss of equipment and depresiation, on fixed assets and who that effects profit and loss.

Many thanks


Andy

chrismac1

If you have claimed capital allowances on an asset and it still has a tax value greater than zero, treat this event as a disposal of the asset with zero proceeds. Where the asset has either been put through as "equipment expensed" or 100% capital allowances claimed on it during its lifetime, its tax value is zero and disposal proceeds zero hence zero tax impact.

Section 89 relief - a terminal loss can be carried back 3 years and may generate a repayment of tax paid in earlier tax years. This needs care as there are strict rules on how this is done.