Olive is self-employed, preparing her accounts to 5 April each year. She claims capital
allowances on a motor car used in her business. The motor car has a CO2 emission rate of
145 grams per kilometre, with 40% of Olive’s mileage for private purposes. The motor car
had a tax written down value of £12,000 at 6 April 2020. Olive sold the motor car for
£6,000 on 1 November 2020.
THE ANSWER IN THE TEXT £(12,000 – 6,000) ? 60% = £3,600
DOUBTS - 1) The car is being disposed resulting in a capital allowance but the car Is being
disposed at 1st November 7 months after the start of the tax year so shouldn't
we charge the 6% allowance for 7/12 months and write down the value of the
car and then calculate allowance
2) why is the 12000*0.06*7/12*0.60 allowance not provided?
Ask the Tutor ACCA TX-UK
CAPITAL ALLOWANCE
Your question clearly indicates that you have not worked through the Lectures and Study Notes as you are suggesting what you "think" should be right rather than doing what is actually right which is shown in the OT material
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