We have discussed in a previous article the effects on the Income Tax return of the sale of a vehicle for private use or partially used for economic activity. Given that the transfer is usually made for an amount lower than the purchase price, it is normal for there to be a capital loss that is not relevant for tax purposes. However, when it comes to a vehicle that is used for economic activity, the situation is totally different. The treatment of this operation is the same as that given to the sale of any asset used for the activity .
The first thing that comes to mind is that the difference in assets obtained must be reflected in Form 130 together with the income and expenses of the activity. But this is phone number in united kingdom not the case. The transfer of fixed assets is included only in the Income Tax Return , not in the payments on account, in the section corresponding to capital gains and losses . The profit or loss obtained is computed in the savings base, not in the general tax base, as would occur if it were declared as a result of the activity.
Fixed assets are depreciated annually and the amount of such depreciation reduces the purchase price of the asset, such that if the asset were fully depreciated, the total amount of the sale could be considered profit.
In the accounting, the fixed assets and their corresponding accumulated depreciation should be derecognized and the result (positive or negative) should be recorded in account 771 or 671 as appropriate. If the seller is an entity instead of a natural person, the profit or loss obtained will be transferred to the operating account.