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November 27, 2015 at 1:51 pm
i havent understand why we have to take the long life asset first , the machinery is purchased first so why dont we deduct the AIA first from the machine cost and thn apply the remainng limit to the long life asset? is there any condition for AIA for appying it?
December 30, 2015 at 6:07 pm
You apply the long life asset first because it is a special pool asset. If all of the asset was assigned to special pool, you would only get 8% allowance, where as the assets that qualify for main pool give you 18%. 18% is better than 8%, so you always try and put as much of your 8% allowance (special pool) assets (except motor cars as they are not allowed) into the AIA as that gives the person (in this example Kenny) the biggest capital allowance.
November 11, 2015 at 10:26 am
This is chapter 6 in my book; chapter 5 (income from self employment) appears to be missing on here. does anyone know where I can find the lecture for this?
June 27, 2015 at 12:23 pm
I wonder whether in the illustration number three we could have listed as the first addition qualifying for AIA the machinery purchased for £45000 rather than the long life asset? Or there was a reason why we used the long life asset before the machinery?
June 28, 2015 at 7:47 pm
Have a look at what dougie93 says below
November 18, 2015 at 10:26 pm
I still don’t get it though because the 45000 was still taxed at 18% so it didn’t make a difference?
May 7, 2015 at 2:39 am
I am a bit confused with illustration 3. Why did we have to work out the long life asset 1st, could we have done the adjustment to plant 1st. Please shed some light here.Thank you.
May 10, 2015 at 3:12 am
Its a tax saving method. Remember special rate pool items only gets WDA @ 8% and main pool items gets WDA @ 18%. So by putting special rate pool items against AIA firstly, it would less the amount of items taxed at 8%.
May 10, 2015 at 5:30 pm
Thank you dougie93.
November 18, 2015 at 10:29 pm
Why not just do the Machinery first and just put it in the main pool?
November 27, 2015 at 1:58 pm
capital allowance is a relief for companies right? or its just like depreciation a non cash item? or if its a noncash item then how can we get benefit from it or how can it saves our taxs? we apply 18% or 8% how does it effects? in both cases at last the whole amount will someday reduced to nil thn why we do that?
March 6, 2015 at 3:11 am
hey guys, i think something is wrong with the link of this lecture..everything i reach half way..it stops and and wont ever load back…
March 6, 2015 at 3:44 am
i kinda skipped it a bit at the point it stuck at and it loaded…so i guess it works…nice lecture though…i understand it…
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