Statement A is false.
Expenditure incurred in the seven years prior to the commencement of trade is treated as having been incurred on the first day of trading.
Statement B is true.
(i) Business is unincorporated
The annual investment allowance will be increased to £625,000 (£500,000 x 15/12). Accordingly, the capital allowances for the 15-month period will be 100% of the cost incurred of £180,000.
(ii) Business is a company
For a company, the 15-month period of account ending on 30 September 2016 must be split into two accounting periods: one for the first 12 months ending on 30 June 2016 and the other for the remaining three months ending on 30 September 2016. The machinery purchased on 1 September 2016 falls into the second accounting period.
Main pool £
|Three-month period ending 30 September 2016|
AIA (maximum £500,000 x 3/12)
|WDA (18% x 3/12)||(2,475)||2,475|