ACCA Taxation (F6) Practice Exam

When can structures and buildings allowance be claimed?

1. When a building is under construction

2. When a building is brought into qualifying expenditure

3. Only if the building is new

4. When there is a change in ownership

The correct answer is: When a building is brought into qualifying expenditure

Structures and buildings allowance can be claimed when a building is brought into qualifying expenditure. This means that the allowance is available as soon as the expenditure incurred on the construction or acquisition of the building is capitalized and meets the qualifying criteria, such as being used for a qualifying purpose. The focus here is on the point at which the capital expenditure is recognized for tax purposes rather than the status of the building itself. This allows taxpayers to account for the cost of constructing or purchasing a building over time, benefiting from the tax deductions associated with that expenditure. In contrast, claiming the allowance during the construction period or only for new buildings is not correct, as the allowance is specifically tied to when the expenditure is recognized as qualifying. Any stipulation regarding changes in ownership also doesn't pertain to the claim itself but rather to other considerations such as potential adjustments in tax properties.