Another form12 q

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guideanna

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Sorry again just another q about form 12. This is my first year doing it.

Part 14 under the capital allowance amount i put in lets say 10000
Then the next line "capital allowances used against rental income for 2010"- is this the 12.5% of the total capital allowance?

Then the next line "capital allowances available for carry forward" - is this the total capital allowance minus the amount claimed for 2010.
And if so does that mean next year i'll only be claiming 12.5% of that new total being carried forward?

Thanks
 

In the Form 12, the term Capital Allowances refers to the amount of allowance you are claiming, not to the actual cost of the asset you are writing down.

So under part 14, the figure you put in for Capital Allowances for 2010 is the 12.5% that relates to 2010 (so in your example, 10,000 x 12.5% is 1,250).

The next line is how much of these capital allowances are being used against rental income in 2010 - if you had net rental profit of 1,000, then you would use 1,000 of capital allowances, reducing the taxable amount to nil.

The next line is "capital allowances available for carry forward" - so using the example above, where the rental profit was 1,000, and you had used 1,000 of capital allowances, then you would have 250 to carry forward.

This means that in next year's return you would have an amount to enter at the line "Capital Allowances brought forward from a prior year" of 250, then (assuming nothing changes in between) you would have another 1,250 of capital allowances for 2011, meaning you could use up to 1,500 of capital allowances against rental profit (if any) in 2011....

Hope that makes sense...
 
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