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  1. avatar says

    Can any 1 help me in trading losses topic ? In last 12 months losses we will Cary back on LIFO basis , bt in current year we have We also have incom frm other source, first it will b adjusted in current year r direct Carry back ?

  2. avatar says

    Annual trading income relief for traders is calculated assuming Mr A let out a shop to Mr B and a premium of E60000 pounds is received and the lease is for 20 years (note it is only for short term lease less than 50 years).
    property income assessable to Mr A will be calculated using this formula

    premium 00000
    premium * (N – 1) * 2% = ( 0000)
    ______
    property income assessable 000000
    ________

    premium received 600000
    less deductible amount
    60000 * (20 -1) * 2% = (22800)
    _______
    assessable income is 37200

    or u can use this method by open tuition

    P * 51-N/50
    =60000 * 51-20/50
    60000* 0.62 = 37200

    which ever method u use u will arrive at the same answer

    coming to your question, if the property is use for trading by Mr B , he will be allowable for a relief on the premium paid to Mr A for deduction which is calculated as assessable income calculated earlier on by the number of years given in initially

    = 37200/ 20
    relief deductible = 1860 pounds from adjusted trading income of of Mr B

    i hope that answers your question

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