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Hi Sir,
For this question, the tax is payable in next year. However, when calculating the tax saving on capital allowance, the suggested answer include the tax saving on capital allowance within the same year.
If we use the way of deducting tax allowable depreciation to arrive the taxable profit and add it back later, the tax effect on capital allowance (120m for year 1) will show in next year instead of year 1. May i know which one is correct? Thanks.The capital allowance savings should really have been taken 1 year later than in the examiners suggested answer.
This was the previous examiner – the current examiner deals with the allowances correctly 🙂
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