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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › Balance Charge is arrived by deducting the original cost on capital allowance
Hi Sir,
I come across a question which I don’t quite understand.
A motor car’s original cost is 9300, it is sold for proceeds 9700.
The car belongs to Special rate pool, whose TWDV b/f is 5700
So why the balancing charge is arrived by subtracting the original cost of 9300 from the TWDV b/f figure of 5700 = 3,600?
The tutorial note says “the proceeds for motor car are restricted to the original cost figure of 9300.
May I ask which chapter is this covered? The tax has too much information and I just couldn’t hold all of them.
Thank you.
Chapter 5, page 33, section 5 Sale of Plant & Machinery