A university lecturer acquires a computer on 6 April 2003 for research purposes. The requirements of EIM70790 are met and she is entitled to capital allowances. The computer cost £6,000 and was financed by a loan on which she paid interest of £600 in 2003/04. 25% of her use of the computer is for private purposes. She is entitled to capital allowances to the extent of the business use, see EIM36570. The computation for 2003/04 would be:
|
£ | |||||
| Cost | 6,000 | Business element | Allowance due | ||
| WDA (25%) | 1,500 | (75% x 1,500) |
= | 1,125 | |
| Residual value | 4,500 |
Relief is available to the same extent for interest paid.
75% x £600 = £450
Relief for £450 is available against general income.
