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Hello guys,
I would like to know abut the order of priority for the Annual Allowance. I know the special pool comes before the main pool. The main pool also comes before short life assets and private use assets. But what about the short life assets and private use assets?
Special pool > Main pool > ??? > ???
Thanks in advance.
This is not an issue for your exam as with both short life assets and private use assets a balancing adjustment on sale will arise on sale, but if AIA was available for one but not the other then best to apply the AIA to the one with the longest life and lowest residual value as any balancing adjustment will be a balancing charge which is clearly not desirable.
Keep your focus on core issues and do not be distracted by “but what if …… ” questions!
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