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Hi sir, for the tax saving on unclaimed allowance, shouldnt there be no WDA claimed on the year of disposal. Hence we shouldnt be using the unclaimed allowance of 12.27m to calculate tax savings.
Instead, we use
25.7 – 7.0 =18.7 (bal allowance)
tax benefit: 18.7 x 30%= 5.61but the answer given is (12.27 x 30%= 3.68).
Im confused, hope you can explain to me, thank you !Although you are correct (and this question and answer were prepared by the previous examiner), it doesn’t actually make any difference.
There should have been a balancing allowance of 18.71 in the final year.
Instead, the examiner has a writing down allowance of 6.43 and a balancing allowance of 12.28.
12.28 + 6.43 = 18. 71 🙂
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