CA23520 - PMA: Cars: Single asset pool, restriction on WDA and contributions
CAA01/S74 - S76
If the expenditure on a car exceeds £12,000 and the car is
not a qualifying hire car
CA23510, or a qualifying car with low
carbon dioxide emissions
CA23153, the expenditure is put into a
single asset pool. The WDAs are calculated in the normal way and
then restricted to an annual amount of £3,000.
Example Geronimo draws up his accounts to 31
December each year. He buys a Cadillac to use in the business for
£36,000 on 4 July 2002 and claims WDAs. This is the capital
allowance computation for the year ended 31 December 2002.
| Cost of Cadillac | £36,000 | |
| WDA restricted to £3,000 | £3,000 | |
| Written down value carried forward | £33,000 |
If Geronimo had drawn up his accounts for the 8 months to 31
August 2002 the WDA on the Cadillac would have been £2,000 (=
£3,000 x 8/12).
If a person receives a contribution towards the expenditure
on a car costing more than £12,000 the person making the
contribution can claim WDAs on the contribution in the normal way.
However, the annual WDAs for the person making the contribution and
the recipient are restricted to a total of £3,000. Effectively
the £3,000 is divided between them.
Example In the example above Geronimo receives a
contribution of £12,000 from Sonny. Sonny’s annual WDAs
are restricted to £1,000 (= £3,000 x £12,000 /
£36,000) and Geronimo's are restricted to £2,000 (=
[£36,000 - £12,000] / £36,000).
