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Hello there…
I have a small doubt regarding this question..well there is a inflow of cash in 50000 when it’ll be sold at the end of the year 3 shouldn’t tax be charged on this ??? In the solution given in the problem they haven’t charged the tax on this income Please help me outThe proceeds of sale of an asset that has been getting capital allowances are never taxed as income.
For tax purposes the proceeds are subtracted from the tax written down value and the difference is either a balancing allowance or a balancing charge.
You must watch my free lectures on investment appraisal with tax, because capital allowances occur in almost every exam.
The lectures are a complete free course for Paper F9 and cover everything needed to be able to pass the exam well.
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