Question

I want an example of capital allowance tax planning ( if I want to time my tax how this could be explained in an example using numbers keeping to consideration that AIA is 1,000,000.

Answer 1

Annual Investment allowance is a taxable benefit against expenditure incurred for any purchase of capital asset. This allowance can be used for purchase of a business asset by a sole proprietary firm, partnership firms or corporation.

Effective January 2019, the eligible AIA is 1 million. The follwoing assets can be purchased in order to claim the benefit of AIA in a particular year.

1. office equipment including furniture and fixtures, software or hardware equipments
2. parts of a building like a unit
3. office moveables like refrigerators, ovenm air conditioners etc
4. any vehicular equipment used for business
5. machinery used for business