Skip to main content What is tax written down value?
Definition of tax written down value
The tax written down value of an asset is the original value of the asset less any capital allowances you’ve claimed on that asset.
In this context, the asset’s “original value” would be the amount that you brought it into your business for. If your business bought the asset new, then the original value would be the amount your business paid for the asset. If you used the asset personally before bringing it into your business, then the original value would be the asset’s market value at the time you brought it into your business.
If you’re a sole trader, you’ll also need to adjust the original value down if you use the asset privately as well as for your business. For instance, if you bought a new computer for £2,000 and you’re going to use it 50% for business and 50% personally, the asset’s original value in your business would be £1,000 – not £2,000.
If you’ve claimed Annual Investment Allowance on an asset, its tax written down value will be nil, because the Annual Investment Allowance would have been for 100% of the asset’s value.
Disclaimer: The content included in this glossary is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this glossary. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.