Question 1

Section B - Case 3: Titanium Forging PLC

Titanium Forging PLC is a heavy manufacturing company. It recently changed its accounting date, resulting in a 15-month period of account from 1 January 2023 to 31 March 2024.

The company constructed a new factory building. The total cost was £3,000,000, which included £500,000 for the land. The factory was brought into use on 1 July 2023. What is the Structures and Buildings Allowance (SBA) available for the 12-month accounting period ended 31 December 2023?

Accepted Answer

Deduct land cost to find qualifying expenditure. Apply the 3% SBA rate. Pro-rate the allowance from the date the building is brought into use to the end of the accounting period.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Including the land cost, or forgetting to pro-rate the allowance from the date of first use.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA TX — Taxation Practice Exam 4

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