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Hi,
I know this is not going to be asked in an exam, but would you mind answering it anyway please, because it’s been bugging me!
Basically, I understand that you can use any amount of capital allowance each year, up to the AIA or 18% of balance of the main pool.
However, which would be more sensible in the long run? To get your taxable profit down to the personal allowance and pay a bit of class 4 national insurance, or get the taxable profit down to the nil rate national insurance limit, and waist a bit of personal allowance? Assume that there’re not sufficient capital allowances to create a loss.
Many thanks in advance!
The issue about limiting the CA claim to utilise the PA or so as not to waste the use of a loss is of course very examinable but in your scenario if you limit the CA claim to just avoid wasting the PA then higher CA’s will be available in the future to achieve saving for BOTH IT and NIC rather than just achieving NIC relief now.
A further issue is that there may not be any NIC issue anyway if the income of the taxpayer includes other income within the 11,500 figure you seek to establish
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