This is the
amount taken into account in respect of the old
ship.
If the old ship is in a single ship pool, the amount taken
into account is the disposal brought to account less the balance in
the single ship pool transferred to the general pool. Effectively
this is the balancing charge that would have arisen in the single
ship pool.
If the shipowner has transferred all or part of the
expenditure on the old ship out of the single ship pool
CA25150 the expenditure on the old ship
will have merged with the other expenditure in the pool to which
the expenditure was transferred. Any balancing charge that arises
cannot be precisely attributed to the ship. In that case this is
how you calculate the amount taken into account in respect of the
old ship.
Assume that the old ship is the only asset in the main pool
and has always been and that all the allowances available (both
first year, if any, and writing-down) have been claimed.
Effectively, you calculate the maximum allowances that would have
been given if the ship had stayed in its single ship pool. This
gives you a notional figure for the pool brought forward when the
disposal event happens. You then calculate what the balancing
charge would have been on the basis of those assumptions and that
is the amount taken into account in respect of the old ship.
After the amount taken into account in respect of the old
ship has been calculated on the basis that it is having single ship
treatment the shipowner may give notice that single ship qualifying
activity treatment of the old ship is to end. In that case the
amount taken into account to the old ship is recalculated on the
basis that single ship qualifying activity treatment does not apply
to it. The recalculated amount taken into account is not
necessarily the same as the amount taken into account already
calculated because the shipowner may not have claimed all the
allowances available. The recalculated amount may be higher. The
single ship pool calculation takes account of the allowances
actually claimed. The recalculation takes account of the allowances
that could have been claimed.
Example Keiron buys a ship for £1,000,000 in
his accounts year ended 24 May 2004. He does not claim any
allowances on the ship in the year ended 24 May 2004. He claims a
WDA of £250,000 in the year ended 24 May 2005. He sells the
ship for £950,000 on 4 July 2005.
The balance in the single ship pool on 25 May 2005 is
£750,000 (cost £1,000,000 less WDA £250,000). The
amount taken into account in respect of the ship is £200,000
(disposal value £950,000 less pool balance £750,000). On
1 December 2005 Keiron makes an election to keep the expenditure on
the ship out of the single ship pool. The amount taken into account
in respect of the ship is recalculated like this. Assume that the
FYA of 40% available for the year ended 24 May 2004 was taken as
was a WDA of £150,000 for the year ended 24 May 2005. This
makes the balance in the pool at 25 May 2005 £450,000 and the
amount taken into account in respect of the ship £500,000
(disposal value £950,000 less pool balance £450,000).
