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may i know how to deal with the capital allowance after y6? which mean we still have 31.1(51.84-20.74)capital allowance not claim yet at the end of y6.
Should we claim all the remaining capital allowance at the end of the project(51.84 instead of 20.74)?
Not quite.
We do have a 31.1 tax written down value.
However the rule is that in the final year we subtract any sale proceeds from the tax written down value, and the difference is either a balancing allowance or a balancing charge.
If there had been zero sales proceeds then yes – there would have been a allowance of the remaining 31.1.However here there is a residual value of 40.0. Therefore we have a balancing charge of the difference of 8.9 which results in additional tax being payable (we have had more allowances than in total we are entitled to which is why there is a balancing charge)
if there has been no sales proceeds in this question, we should claim 51.84 balancing allowance in final year( which mean 51.84* 0.3 =tax saving on capital allowance), am i correct?
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