Hello,
- On 1 Apr 18,Online Ltd acquired a leasehold office building, paying a premium of pounds 90,000 for the grant of of a 10 year lease. The office was used for business purposes.
1. Online year ends is on the 31 March 2019.
2.The calculation for lease deduction is as follows:
- 90000-(90000 x 2% x(10-1)=73800
-73800/10=7380.
3. Could you explain the reason behind the calculation?
-From what you've explained in your lectures I have understood that calculation for 73,800; however I struggling with that of the 7380.
Thanks in advance.
Ask the Tutor ACCA TX-UK
Corporation Tax
7380 is the premium paid by the trader and that is the amount deductible
it is calculated by property income / no of years
You must be careful to ensure whether you are dealing with the property income assessment for the LESSOR or as here the annual trading profit deduction available to the lessee - see chapter 3 section 6, and on this issue specifically note 6.2 and example 6
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