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Dear sir,
I was solving the Taxation Practice Question “11. Carl” from Open Tuition Notes page 222.
In the solution to the question, I realised that a Motor Car was disposed from the special rate pool, leaving no other asset in that pool, however, no balancing allowance was granted. Instead, a written down allowance of 6% was applied.
Meanwhile, I have come across many examples with no cessation of trade but when cars are disposed off a balancing allowance or charge is applied.
I am interested to know whether this was a mistake or am I missing the law.
Thank you for your attention.
Kind regards.
Steven.I am wondering whether you have worked through the lectures and notes – as I think you may not have studied “assets with private use by the proprietor” (non pool assets – usually cars!) where each individual asset disposal creates a balancing adjustment.
The only time a balancing allowance arises on a pool is on cessation of trading.
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