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Forums › Ask CIMA Tutor Forums › Ask CIMA F1 Tutor Forums › Calculating Corporate Income Tax
In Kaplan’s F1 Exam kit there is a question pertaining to the calculation of corporate income tax.
It states:
“Tax Relief on capital expenditure is available at the following rates;
– Buildings 4% p.a straight line basis
– All other Non-Curr. tangible assets are allowed tax depreciation at 27% on reducing balance basis.
Non Current Assets cost @ 01/01/20X5
Land – $27,000
Buildings – $70,000
PPE – $80,000
However, in the answers, there is no tax depreciation relating to the land despite there being no instructions to avoid land in the computation. Is there a specific rule relating to land I am unaware of?
Thank you in advance
Hi,
Yes, land is not subject to any tax depreciation as it will not fall in value. It will only appreciate and the gain will be taxed upon final sale.
Thanks