Question 6note 2 - Sample


ACCA TX (F6 UK) Past papers Answers A6

Working 2 – Annual investment allowance
The annual investment allowance is reduced to £166,667 (500,000 x 4/12) because Lucky Ltd’s accounting period is four months long.   1

Tutorial notes:
(1) The expenditure which is integral to the building is included in the special rate pool.

(2) It is beneficial to claim the annual investment allowance of £166,667 initially against this integral features expenditure, as it would otherwise only qualify for writing down allowance at the rate of 8%.

(3) The computer purchased on 19 August 2014 is pre-trading and is treated as incurred on 1 December 2014.

(4) The motor car has CO2 emissions up to 95 grams per kilometre, and therefore qualifies for the 100% first year allowance.

The CO2 emission for FYA cars in 2015/16 was 95 grams or less.

This is why this gram emission has been used in the question.