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CAPITAL ALLOWANCE

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › CAPITAL ALLOWANCE

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by Tax Tutor.
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  • Author
    Posts
  • November 2, 2021 at 2:41 pm #639780
    shaunak22
    Participant
    • Topics: 218
    • Replies: 41
    • ☆☆☆

    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?

    November 3, 2021 at 11:10 am #639832
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    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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