Taxation of the unincorporated business (for P6 (UK)) - part 4: self-test

Test your understanding

(1). State whether the following statements are true or false in respect of a trader commencing a new unincorporated business.

A Expenditure incurred in the seven years prior to the commencement of trade is treated as having been incurred in the first tax year of trading.
Capital allowances are given in respect of the cost of assets purchased for use in the business prior to the commencement of trading.

(2). A new business began trading on 1 July 2016 and will prepare accounts for the 15-month period ending 30 September 2017. Initially it rented the machinery it required but on 1 September 2017 it purchased machinery for £180,000.

What are the capital allowances for the 15-month period if the business is:

(i) unincorporated, or
(ii) a company?