Skip to content

ACCA Applied Skills · Taxation (UK) · Property and investment income

Priya, a higher rate taxpayer, lets a commercial building on which she claims a structures and buildings allowance, and she sells it in 2025/26 for a gain. Which statement is correct about the effect of the structures and buildings allowance claimed on the disposal?

The allowances claimed reduce the cost used in the capital gain computation, so the gain is larger. There is no balancing charge in the property income computation for structures and buildings allowance, and the 18% main pool rate does not apply to it.

  1. AThe allowances claimed reduce the cost used in computing her capital gainCorrect
  2. BThe allowances claimed are clawed back through the property income computation as a balancing charge
  3. CThe allowances claimed have no effect on the capital gain computation
  4. DThe allowances claimed are repaid at the 18% main pool rate

Explanation

Structures and buildings allowances claimed are deducted from the cost when computing the gain, increasing it. There is no balancing charge or allowance for these. The pool rate of 18% is irrelevant to structures.

Did you get it right without looking?

One question tells you little. A timed set on Property and investment income shows your real accuracy, how long you take and where you lose marks.

Practise Property and investment incomeFree diagnostic mock

More Property and investment income questions