Capital allowances and illustration
In this lesson, you'll learn how capital allowances work from April 2024 onwards and how to handle balancing charges when assets are disposed of.
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In this lesson
- 0:00 Capital allowances from April 2024
- 0:27 Balancing charges on enhanced allowances
- 3:02 Capital allowance planning strategy
- 3:52 Trimble Limited worked example
- 6:25 Calculating final tax position
About this lesson
You'll discover the new enhanced allowance rules (100% first year allowance on main pool assets and 50% on special rate pool assets), understand why the Annual Investment Allowance is preferable, and see how to treat proceeds from assets that previously claimed super deductions or special rate allowances. The lesson includes a worked example showing how to calculate capital allowances for a restaurant company, demonstrating the practical application of these rules in your tax computation. This is essential knowledge for the TX (Taxation) paper. The video covers the specific treatment of balancing charges depending on which capital allowance was originally claimed, a common exam scenario. You'll learn a straightforward decision tree for capital allowance planning and how to integrate balancing charges into your adjusted trading profit calculation. By working through the Trimble Limited illustration step by step, you'll see exactly how to set up your computation columns and apply the rules correctly under current legislation.
Duration: 7m
Transcript
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