Taxation of the unincorporated business (for Advanced Taxation - United Kingdom (ATX-UK) (P6)) - 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.
B  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 2017 and will prepare accounts for the 15-month period ending 30 September 2018. Initially it rented the machinery it required but on 1 September 2018 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?