Tx notes fa22 Final

June 2023 to March 2024 exams
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7. Full Pro forma Capital Allowances Computation 
Notes
(a)
The AIA is allocated to assets included in the special rate pool in priority to those included in 
the main pool, though it is very unlikely that in an income tax question (dealing with an 
unincorporated trader) that the total expenditure qualifying for AIA will exceed the £1M annual 
limit.
(b)
If the balance on the main pool and /or special rate pool is 
≤
£1,000 for a 12 month accounting 
period, the small pool WDA could be claimed.
Main 
pool 
Special 
Rate 
Pool
Short life 
asset (1)
(Business 
%) Private 
use Asset
Allowance
s
£
£
£
£
£
£
WDV b/f
X
X
X
Additions qualifying for AIA:
- long life assets
X
- integral features of a building
X
- thermal insulation
X
AIA (Note a)
(X)
(X)
Additions qualifying for AIA:
X
- machinery
X
- plant
X
AIA (Note a)
(X)
(X)
X
Other Additions:
Motor cars
emissions 1-50g/km
X
emissions >50 g/km
X
Disposals
(X)
(X)
X
X
X
X
(Note b)
WDA 
×
18%
(X)
(X)
WDA 
×
18%/6%
(X)
(X)
(
×
Business use)
WDA 
×
6%
(X)
(X)
Balancing allowance
(X)
(X)
Additions qualifying for FYA:
Motor car zero emissions
X
FYA @ 100%
(X)
(X) 
Allowances for period
(X)
WDV c/fwd
X
X
–
X

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56
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June 2023 to March 2024 exams
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Example 6 (Comprehensive) 
Ling prepares accounts to 31 March. The WDV of the main pool at 1 April 2022 was £30,000, and on 
a car (90g/km) £14,000. The car was used by Ling 20% for private use. 
The following transactions took place during the year ended 31 March 2023
6 May 2022
Purchased electric motor car (zero emissions)
£17,000
10 June 2022
Purchased computer equipment
£60,000
25 June 2022
Purchased a machine
£84,000
7 September 2022
Purchased plant
£60,000
10 November 2022
Purchased a motor car (emissions 40g/km)
£11,200
3 December 2022
Purchased thermal insulation for the business building
£28,000
9 December 2022
Disposed of the car used privately by Ling
£8,000
Calculate the capital allowances for year ended 31 March 2023 assuming that no short life 
asset election is to be made in respect of the computer equipment. 
8. Structures & Buildings Allowance 
A new Structures and Buildings capital allowance (SBA) has been introduced which will only be 
tested in our exam for building construction on or after 6 April 2021 for unincorporated traders and 
for companies on or after 1 April 2021.
An annual WDA will be available on the qualifying cost of a qualifying building at a rate of 3% on a 
straight line basis.
Qualifying buildings will include factories, warehouses and o
ffi
ces along with both wholesale and 
retail properties and will further include the cost of walls, tunnels and bridges.
Any part of a building used as a dwelling house and the cost of any land will not qualify for SBA.
Where an unused building is bought from a developer the price paid – excluding the value of the land 
- will be eligible for the SBA from the time that the property is brought into a qualifying use, such as 
principally its use within a trade or letting, hence if a building is only brought into such use part way 
through an accounting period then the WDA must be time apportioned.
Expenditure which qualifies as plant and machinery cannot also have SBA. 
If a question states you are dealing with the