Tax question

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March 23, 2019 at 8:09 pm #510238
xenofondas
Member
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Is a tax allowance of say 50% on new PPE a tax depreciation affecting TWDV the following year or does the TWDV in period two = cost – accounting depreciation ?

e.g new PPE of 100 000
allowance of 50%
accounting depreciation 10%

TWDV for period 2 = 50 000 or 90 000?

thanks
March 24, 2019 at 8:48 pm #510319
P2-D2
Keymaster
- Topics: 4
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Hi,

The 50% is applied to the 100,000 in the first year to give a TWDV of 50,000 and then the 50% is applied to this 50,000 to give the TWDV in the second year. The accounting depreciation is irrelevant in calculating the TWDV.

Thanks
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