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Hi Sir,
I am currently going through Tax for the first time and am wondering about Example 5. I understand the whole process itself, but am just confused about the Capital Allowance calculation for the WDV c/f.
The main pool is 8528, which makes sense to me. But the figures to the right of this value (14504 and 2483) do not ring any bells.
Why is the WDV c/f for the business use asset not 14800 – 710, much like the Main pool calculation? And also, what is the 2483 for?
Help is much appreciated.
Kind regards,
YazanHi Yazan many thanks for your question and it would appear that I have not completed the typing up of the updated answer from last year!!
The 2483 does not exist at all and hence your confusion with that number so please disregard it.
The 14504 is also a number from the previous year that has not been updated – please note however that the balance to c/f should NOT be 14800 – 710, but should be:
14800 – 1184 = 13616
Where private use by the proprietor restricts the CA claim (as here to 710) we must always deduct the full CA (1184) in computing the balance c/f – in this way the taxpayer loses that private part of the expenditure from ever being available for CA rather than merely delaying its eventual availability.
Hope this helps and again many thanks for bringing this to my attention and apologies for any confusion it may have caused. Good luck with your studies!
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