CHAPTER 4 | Example 1 | Note 4 | Page 45

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January 24, 2024 at 2:47 am #698972
HlaMinnOo
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It says in Note 4 that the building was in usable stage at the time of purchase. The renewal for the clothing shop is 2200 and for a private flat is 1050.
As I understand , 2200 should be noted as not allowable because of it being an improvement to an asset and becoming capital expenditure. And then, 1050 is regarded as not allowable ,being a private matter
But in the answer, only 1050 is regarded as not allowable and included in the add back: disallowed expense.
Can you explain why 220 is not included in the Add Back: Disallowed Expenses session.

Thank you in advance.
January 24, 2024 at 5:44 pm #699019
JillyB
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Decorating is not an improvement and is allowable for a business expense
January 26, 2024 at 2:56 pm #699125
HlaMinnOo
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Thank you.
January 29, 2024 at 9:57 am #699255
JillyB
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no worries – just remember capital items improve and revenue items repair – if, in the exam, you are not sure then decide and write a note for the marker explaining what you decided and what rule you applied.
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