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Hello,
Can you explain to me why there is not a balancing allowance for carls motor car purchased on 1 Dec 2017 and sold on 1 Dec 18? There was no C.f. balance and there is no other assets in the special rate pool. The solution has charged 8% wda on it
Thanks
WilliamNot sure whether you’ve used the notes and lectures but if you look at Study Notes Chapter 5 p.37 note 7.3(b) you will see that the only time a balancing ALLOWANCE may arise on the main or special rate pool is on the cessation of trading.
It does not matter whether any of the pool assets are still owned a WDA will continue to be charged so long as the business continues!Balancing allowances are allowed on the Non Pool Assets:
– Private use
– Short life assetsEven if trading continues. Correct?
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