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Note 3
While looking at Note 3, legal fees in connection with the purchase of clothing shop of 1200 pounds, you said this is probably acceptable as it’s the fee but while working out the final computation you have added back this fee. So I’m confused whether to add this back or not and if it should be added back, then why?
The legal fee in connection with the property in note 3 is capital in nature and is an allowable dedcution in the capital gains tax computation if and when the property is sold. So it was dedcuted in the accounts and we need to add it back here so that it does not affect the trading profits.
Add back for IT and allow in CGT
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