Capital Allownces

Capital Allowance are trading expenses and r deducted in arriving at trading profits.
CA is given for period of accounts, pro-rated for long or shor periods.NB: the length of ownership of asset is irrelevant.
CA is given either as first year allowance(FYA), Annual Investment Allowance (AIA) or Written Down Alloance ( WDA).

Two pools exist-
1. General Pool- plant & mach. r pooled & the WDA is cal. on a pool basis
– Entitle to AIA (Max. 50000. this fiqure can be pro-rated)
-FYA of 40% on bal. after AIA
-WDA of 20%

2. Special Rate Pool contain long life assets, Thermal insulation, cars with Co2 emission over 160g/Km
-entitled to AIA but as part of the overall limit of 50k. NB: only 1 AIA is charges for the yr it can be deducted from General or special rate pool.
-WDA of 10%

short life asset- isf so elected can only be so for 4 yrs, if not dispose of in 4 yrs it will be sent to the general pool eg of shor life asset: computer.
– entitles to WDA of 20%
– FYA of 40%
– AIA but as part of the overal limit of 50k

NB: Cars.
bought before april 2009
– if cost more than 12000 pound- max. WDA is restricted to 3000 pound.
– WDA of 20%
– cars costinf 12k of less r place in general pool

Cars bought after april 2009
-cost more than 12k and emitting 160g/KM place in special rate pool.
-gets WDA of 10% and no FYA.

cars with co2 of 111-160g/Km are paced in general pool and gets WDA of 20% no FYA.

cars with co2 of 110g/Km is low emission gets 100% FYA.

Please be reminded that cars only get WDA, no FYA is given to Cars except low emission cars.

hope this info help.

Hafeezjaved if the one your using says for exam in 2010 or it has the Finance Act 2009/2010 then that’s the one to use.

In the answer to Ques 10 the carried forward value of the pvt use car at 30.6.11 is 10400…… this does not appear arithmetically correct and it carries forward through out the answer…..