Revaluing intangible and applying carried over non-trading loss
I have an intangible (website valuation) that, because of an industry event, I need to revalue. I also have a non-trading loss (from a previous amortisation in a loss making year) carried through to the current year, I believe I can apply that loss to the non-trading profit generated by the revaluation of the intangible - is that correct?
I'll give some specific (illustrative) figures so that my question has full context
The website was purchased in 2005 for £2000. Amortised on a straight-line basis over 8 years (expected useful economic life on a prudent basis), this gave rise to a £250 loss each year applicable against other profits.
In 2009, the company generated a loss, so the £250 loss was carried forward. The company has had profits since but there have been no non-trading profits to apply against that non-trading loss of £250.
In 2011 an industry event extended the useful economic life of the website, so I propose to revalue the website. At beginning of 2011, the carrying value of the website is £500. I believe (based on increased expected future profits from it) the extended life now values it at £1200, to be amortised on a straight-line basis over 6 years (expected useful economic life on a prudent basis)
My understanding is that I now have a non-trading exceptional profit for 2011 of £700 from this revaluation, and that I can apply the non-trading carried over loss of £250 to leave a non-trading taxable profit of £450 in 2011. Is that correct?
Additionally, the company made a trading profit of £10000, so the total taxable profit would be £10450, and the new annual amortised loss of of £200 can be applied to reduce this taxable profit to £10250.
I'd be grateful for any comments on whether I understand this correctly or not. Thanks
- Director's tax return 215 4
- Payroo Employer allowance query 126 1
- MONEYSOFT - EARLIER YEAR UPDATE 250 7
- Would this save hours of your time? 392 9
- Wrong career 440 18
- Laptop purchase 1,370 20
- PTP software disaster 241 2
- Producing graphical KPI's etc 166 4
- CIS repayment shambles finally over? 214 2
- Treatment of EU Purchases on Sage 94 2
- Tricky VAT question 163 1
- RTI Annual Scheme Query 107 2
- VT accounts licence key 250 5
- Weely paid employees 217 2
- Splitting the tax year 91 1
- FPS Submission 147 2
- Value pricing 645 20
- non resident receiving UK dividends 210 3
- P11d & Medical Ins 140 1
- vat return 226 1
- Residential Property Purchase Above £750K 792
- Using Sage with Sofa Categories 546
- Does anyone have an unwanted ICAEW wooden plaque? 412
- Goods shipped inter EU and VAT Reporting 292
- Free Tax Legislation? 259
- Director Loan account operation 238
- Non-Resident Director - UK Tax Position? 236
- transferring simply accounting 2010 from xp to windows 7 236
- Sage 200 and Access Dimensions reviews 229
- Paye procedures for CVA 159