Capital Allowances

Writing down allowances are scaled down if the length of the chargeable period is less than 12 months but are not scaled up if the length of the chargeable period exceeds 12 months.

• True

• False

John, a sole trader has elected to apply GAAP. His business bought the following assets during the year ended 31 December 2024. If John wanted to maximise capital allowances, which would be allocated to the main pool for capital allowance purposes?

• A car for a staff member with emission rating of 0g/km

• A car for a staff member with emission rating of 42g/km

• A car for a staff member with emission rating of 72g/km

• A car for John which he will use for business and personal purposes with emission rating of 35g/km

A balancing charge is deducted from trading profits for tax purposes.

• True

• False

Fiona prepared accounts for the 5 months ended 31 March 2025. Fiona has elected to apply GAAP. She has no capital allowance pools brought forward. Her only capital acquisition in the period was a car for a staff member purchased on 1 February 2025 for £24,000 with emissions of 75g/km. Maximum capital allowances that can be claimed for the period to 31 March 2025 are:

• £24,000

• £1,440

• £600

• £1,800

Joe prepares accounts to 31 March each year. Joe has elected to apply GAAP. He bought plant for £5,000 in March 2024. The plant was sold for £5,400 in December 2024. How should this disposal be included in the capital allowances computation for the year ended 31 March 2025?

• Disposal proceeds of £5,400 deducted from the main pool

• Disposal proceeds of £5,400 deducted against Annual Investment allowances for the y/e 31 March 2025

• Disposal proceeds of £5,000 deducted from the main pool

• Disposal proceeds of £5,000 deducted from the special rate pool

Andrew prepares accounts to 31 December each year. Andrew has elected to apply GAAP. During the year ended 31 December 2024, he bought a car that he will use for both business and private purposes. The car cost £48,000 and has emissions of 120g/km. Private use of the car has been agreed at 20%. The maximum capital allowances that Andrew can get relief for on the car for the year to 31 December 2024 are:

• £2,304

• £48,000

• £2,880

• £6,912

Alice owns a property which was first let on 1 May 2024 for an annual rental of £9,000 payable yearly in advance. £9,000 was therefore received on 1 May 2024. Expenditure paid during the period from 1 May 2024 to 5 April 2025 was: - insurance £600 - minor repairs £820 -improvement to the property £4,000 - advertising for tenants £240. Alice adopts the cash basis for property income, what is Alice's property income for 2024/25?

• £6,590

• £7,340

• £6,340

• £3,340

Manib lets out furnished rooms in his own home to lodgers. During 2024/25, the rents received were £8,600 with expenses of £1,200 paid. What is Manib's property income for 2024/25 , assuming that he makes any beneficial elections?

• £6,400

• £7,400

• £nil

• £1,100

In 2024/25 Farooq who is a higher rate taxpayer receives net debenture interest of £384. The equivalent gross income is:

• £640

• £480

• £384

• £96

There is an annual limit on the amount that may be invested in Individual Savings Accounts (ISAs) but there is no limit on the total amount that may be invested in ISAs during the investor's lifetime.

• True

• False