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Hi I have a very small question on deferred tax, I’m getting the hang of it….almost.
If an asset has fair value of £1,500 and tax base of £1,000. ( corporate tax rate 30% )
Would this mean that there is a tax deferred liability of 500×30%=£150
My reasoning is that if we sold the asset today at fair value £1,500 we would capitalise a gain vs the tax base (£1,000) of £500×30% = £150 therefore this will become a liability awaiting to arise assuming the sale proceeds.
Thanks alot,
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