Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › Capital Allowance – Short Life Assets – Depooling Election
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Tax Tutor.
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- February 15, 2021 at 2:55 pm #610507
In what circumstance a taxpayer should choose depooling election and what are the advantage of making depooling election?
February 17, 2021 at 12:09 pm #610741As it says in the study notes and is discussed in the lectures it is very unlikely that an unincorporated trader will have expenditure in excess of the AIA limit in which case all expenditure will be fully relieved when incurred and no de-pooling election will be made.
If however total expenditure exceeded the AIA limit – as it may for a large company – then the AIA would be applied to other assets and the de-pooling election applied to the short life assets – this will allow a balancing allowance to be claimed on the sale of the short life assets which would not arise on the sale of other plant and machinery.February 20, 2021 at 2:50 pm #611098Thanks,
Depooling election can only be made where expenditure exceeds AIA limit and bought a short life assets?
February 24, 2021 at 1:16 pm #611543No – it is not that the election “can only be made” in this situation – as stated above it is the only time it would be worthwhile to make the election!
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