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The figure of £10,960 for other expenses includes legal fees of £2,590 in connection with the purchase of the restaurant property. The remaining expenses are all allowable.
Sir please I don’t understand why legal fees of £2,590 in connection with the purchase of the restaurant is not allowable.
We only allow revenue expenditure against income – the purchase of a property is clearly capital expenditure so the legal expense would be treated as an allowable cost in calculating any chargeable gain on the subsequent disposal of the property.
Sory Sir but im still confused. if I understand what you just said the legal expenses should be allowable as they are revenue expenditure, but in the correction they were not allowable.
that is why I was confusedLet me help You Josy, Legal expense is allowable because it is related to a capital expenditure.
Can you refer to the chargeable gains proforma on disporsal of a chargeble asset.
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