LSBF – Q25 Molden Metal Revision Kit / page 56

Hi,

Can you please advice on the question below?

They said the tax adjusted profit was 1,882,600 before the following items: an office building, with a ventilation system and a lift taken into account in capital allowance computation, which is ok.. However I don’t understand why they didn’t include the repairs of 97,400 in the tax adjusted profit ..i understand why it wasn’t into capital allowance as its a revenue expense, not capital expenditure..so it should have been included as a allowable expense in the tax adjusted profit..isn’t it? shouldn’t be as an missing expense, so deducted from 1,882,600?

another issue is, why the purchase of a freehold office building is not included in the capital allowance computation? is it because it will get charge in capital gains in case it will be sold? but if it’s not sold..in the respective year this expense in not included in the adjusted trading profit (deducted as a revenue expense) and is not included in the capital allowance computation either..so for tax purposes is not taken into account at all?

thank you,