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On 1 July 2020, Maison Ltd purchased a freehold warehouse. The warehouse is currently surplus to requirements, so it was let out from 1 November 2020. However, the warehouse was purchased in a dilapidated state and could not be let until repair work was carried out during August 2020. This fact was represented by a reduced purchase price.
Insurance for the period to 31 March (1035) Paid on 1 July 2023
Why is insurance not included in the property income calculation as insurance is an allowable deduction from property income?
The answer says that the ‘cost of insurance for the period 1 July to 1 November is deductible as pre trading expenditure’. No where in the question does it mention this is a newly formed company.
But should I assume that this amount be included in the operating profit figure?
Thank you.
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