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PETE MILLER explains some of the problems that may arise with the new rules on appropriations of stock into or out of a business
KEY POINTS
- The new legislation relates only to trading stock and work in progress
- Difficulty in working out market value
- Interaction with the capital gains tax rules
- Statement of Practice A32 will no longer exist
- Keep detailed records of stock taken for personal use
One of the surprises in this year's Budget was the note (BN19) 'Trading stock' which told us about new legislation intended 'to put on a statutory basis a long established rule which has effect where goods are appropriated into or from trading stock other than by way of trade.
In such circumstances the profits of the trade for tax purposes should be adjusted to replace the cost of the stock or the actual proceeds with their market value'. The draft legislation is in clause 34 and Sch 15...
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