Illustration - "Kelsey"
In this worked example, you'll learn how to handle capital allowances when a business expects to dispose of an asset at a loss. The video walks through Kelsey's situation: she buys equipment for £75,000 but sells it two years later for just £15,000.
This lesson is part of a paid course
Buy the course to unlock every video lesson and the AI Tutor, plus mock exams with feedback on CIMA courses.
Already bought? Sign in
Ask the AI tutor anything about this lesson
It knows every lesson in the course — explanations, clarifications, practice questions.
In this lesson
- 0:00 Kelsey's Capital Allowances Problem
- 0:27 Understanding Asset Pools and Classifications
- 1:27 Short Life Asset Election Strategy
- 2:18 Year One Calculations and Allowances
- 3:21 Year Two Calculations and Balances
- 3:51 Disposal Year and Balancing Allowance
About this lesson
You'll discover why making a short life asset election is crucial here, and how it accelerates your capital allowances claim through a balancing allowance rather than leaving the asset in the main pool. The lesson covers the full calculation across three years, showing you how to split expenditure between the main pool and special rate pool, apply writing down allowances at the correct rates, and maximise your tax relief when disposing of assets.
Duration: 5m
Transcript
Every lesson comes with a full searchable transcript - included with the course.
Get the Advanced Taxation course
All 365 video lessons, an AI Tutor in every lesson and lifetime access.
Already bought? Sign in