June 2023 to March 2024 exams Watch free ACCA TX lectures
(f)
If no disposal takes place within 8 years of the end of the accounting period in which the
acquisition took place the unrelieved balance is transferred to the pool.
The transfer is immediately after the 8th anniversary of the end of the accounting period in
which it was acquired.
(g)
AIA is available against expenditure on short life assets.
(h)
Given the amount of AIA available at £1,000,000 pa, it is very unlikely that the depooling
election would now be worthwhile for most unincorporated traders. An exam question may still
be set of course for an unincorporated trader selling a short life asset where the election had
been made when AIA was previously at a much lower level. Example 3 below, however shows
both the election being made and the resultant e
ff
ect on the disposal of the asset.
Example 3 John prepares accounts to 31 March in each year.
At 1 April 2022 the WDV of the main pool was £16,000.
On 1 July 2022 John purchased machinery for £1,020,000
On 1 September 2022 John purchased a photocopier for £40,000 and made a short life asset
election.
On 1 July 2023 the photocopier was sold for £15,000.
Calculate the capital allowances for years ended 31 March 2023 and 2024 5.3. Balancing adjustments on the Main or Special Rate Pools (a)
A balancing charge can arise at any time on the main pool or special rate pool if disposal
proceeds exceed the balance on the pool. If a balancing charge arises on the capital
allowances computation this would be added to the adjusted trading profit of the accounting
period.
Example 4 Peter prepares accounts to 31 December. In the year ended 31 December 2022 the following
transactions took place:
10 April 2022
Plant sold (originally purchased for £10,200) for £8,600
1 October 2022
Second hand motor car (emissions 45g/km) purchased for £2,000
The WDV on the main pool as at 1 January 2022 was £4,000.
