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Hi Sir,
Do you pro-rata acquired equipments or car lets say in mid year either in Main pool and Special pool.
When working out CA – do you do 6/12 of the amount? Is that applicable for both Sole trader and Corporate?
Thanks
ys u do pro rata wda on main pool and special pool for individual as per period of accounts and nt as acquisition date.
The date within the accounting period that the business incurs the capital expenditure does not affect the available capital allowance. The AIA and WDA will however be time apportioned based on the length of the accounting period itself (as stated by Pooja above). If the accounting period is 9 months then 9/12 of the AIA and WDA will be available irrespective of the date within the period that the expenditure is incurred.
This will only be seen for an unincorporated trader in the opening period of trading that may be either more or less than 12 months. For a company the capital allowance computation is prepared for the chargeable accounting period which can never be longer than 12 months but you may see a short chargeable accounting period in either the company’s first period of trading or whenever it changes its accounting date.
Remember that we never time apportion the FYAok thanks..
Just one more question which require your kind assistance.
If we have a capital loss of lets say £10,000 in 12/13.. In 13/14, we have a capital gain of £5000.
As there is AEA available of £10,800. Hence, how do we use the capital loss c/f from 12/13? Or as the AEA is already cover up the gain. Can we c/f again the loss £10,000 from 12/13 to 14/15?
Capital losses b/f are only used against gains in excess of the AEA, so that in your example the capital loss b/f from 12/13 will not be used at all in 13/14 and will be c/f to 14/15.
Look at OT course notes chapter 12 section 2 and then work example 6.Don’t matter. It is the last thing which need to remember, it is given in the exam.
AEA is 10,900 for 2013/14 and will be given in the exam on the rates and allowances pages provided.
Sir, if you check June 2011 question ( molten metal Plc) you will observe that the cost of the second hand building of £378,000 was not included in neither the capital allowance computations nor the chargeable gain computations. Please what could be the reason for that?
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