ACCA Applied Skills · Taxation (UK) · Property and investment income
Hana runs a property letting business through a trade-like commercial lease and has no other plant. In the year to 5 April 2026 she buys equipment for the commercial let building costing £1,300,000. Using the annual investment allowance in the tax tables, and assuming the equipment is all main pool, what total capital allowances can she claim for the year (ignoring any other first year allowances)?
The total is £1,054,000. The annual investment allowance covers the first £1,000,000 at 100%, and the remaining £300,000 enters the main pool, earning an 18% writing down allowance of £54,000.
- A£1,000,000
- B£1,054,000Correct
- C£1,300,000
- D£1,234,000
Explanation
AIA is 100% on up to £1,000,000, leaving £300,000 for the main pool. Writing down allowance is 18% x £300,000 = £54,000. Total = £1,000,000 + £54,000 = £1,054,000. The option of £1,000,000 ignores the WDA on the excess.
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