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Managing depreciation on part-depreciated 'gifts' ?
Hi. I'm starting a new company from 6 April, and being 'gifted' a laptop. The gift is coming from a company that depreciates hardware over three years, and the machine will not be 3 until June 2010, so presumably I need to record it as a capital item and manage the tax implications of the remaining depreciation for the next 18 months or so.
I've tried recording it as a capital item, purchased in June 2007 at its purchase value... but this results in my accounts showing a whopping great deficit that's (hopefully!) illusory.
Is there a way to record the reality of this situation? I know the purchase date (June 2007), purchase price (£1,732.77) and the NBV in April (£673.86).
I've tried recording it as a capital item, purchased in June 2007 at its purchase value... but this results in my accounts showing a whopping great deficit that's (hopefully!) illusory.
Is there a way to record the reality of this situation? I know the purchase date (June 2007), purchase price (£1,732.77) and the NBV in April (£673.86).
I’m unsure
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Inappropriate?This might be one for your accountant, but you should probably enter it at it's purchase date and price (actual NBV in April) and depreciate it from there.
But if it was 'gifted' to you, that is you didn't actually pay for it, it's hard to know how to justify depreciation or capital allowances in the accounts and tax calculations... -
Inappropriate?Thanks Ed.
The point about exploiting a capital allowance with respect to a gift (no, I didn't pay for it) is a good one, and hadn't occurred to me...
Clearly need to explore the tax practicalities a little further... but at least I know how to record it in FreeAgent once I find out what to record... ;-)
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