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Hi All
Hoping someone can help with understanding on the following Q:
on 1 august 2016 Sam acquired a 40 year lease on some business premises for her trade. Annual rent is £12,000 and upfront premium of £65,500 was payable by Sam.
What is the total allowable deduction for rent & lease premium in Sam’s adjusted profits for the year ended 31 March 2017.
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I understand that I would allow the full £12,000 (x5 months / 12) = £8,000 but I am not sure of the treatment of the Lease.
Thanks,
Vicki
I think you mean 8 months not 5 months in the above example, hence £8,000. In respect of the premium you need to work through the OT course notes and preferably lectures – you will find this issue in your notes – chapter 3 pp.22-23. section 5. Please work through and come back to me if you still have a problem.
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