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Dear Sir
At disposal of an asset all related revaluation surplus is transfered yo retained earnings
Does this mean that there won’t be tax charges on the gains? If there are tax charges, do they occur when the asset is revalued and increase is recognised in other income or at disposal? I’m a bit confused.
Many thanks,
StefanoThe tax charge of a company’s profits is a weird and mystical affair (you’ll see in F6!)
There will be the recognition of a deferred tax liability upon the revaluation of an asset and are resolved / collected by the taxman over a period of years.
For F7 there’s no need to be concerned about the calculation of the tax charge – just accept the information that the examiner gives you
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