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Posted Fri, 17 Feb 2023 17:06:53 GMT by Md Asadur Rahman
A company paid lease premium of £50,000, lease duration is 25 years. I would like to know that whether we should treat the lease as per below mentioned formula or not. P x (50-Y)/50 =50,000 * (50-24)/50= £26,000 Revenue Expenditure 50,000-26,000=24,000 Capital Expenditure 26000 we will claim as expense in 25 years which is = £1,040 per year (26000/25 Year) and 24000 will be capitalised Please tell me whether it is correct or not.
Posted Thu, 23 Feb 2023 13:32:37 GMT by HMRC Admin 32

Leases of less than 50 years are considered to be short leases. Part of any premium you may receive for the grant of a short lease is chargeable to Income Tax.  

Example 2 in the link below shows how to calculate the Capital Gains Tax and the Income Tax.

HS292 Capital Gains Tax, land and leases (2022)

Thank you.

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