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
- Company Pension Contributions 2013/14 116 5
- You think HMRC are inefficient? 458 8
- R&D tax claim 220 6
- Gift to employee 359 12
- Tax Allowance on University Course 76 1
- Transfer of a business 101 1
- I hate HMRC's voice recognition system - The Inept Interrogator 1,107 22
- Investment property where tenant lives rent free 400 8
- VAT Cross Border Invoicing 102 2
- Sage Import Data 296 6
- Slight twist on employment related securities 237 1
- Child and Working Tax Credits and sudden increase in investment income - does this trigger a claw back? 94 2
- Best time software for small practice? 204 2
- Residents Association Corp Tax 312 13
- private to company car? 362 9
- Which address 1,003 11
- Profit accruing in fiduciary or representative capacity 103 1
- Do I charge VAT for event I held in Paris 260 5
- PAYE Refund Farce At HMRC 956 15
- Car maintenance costs deductible against CT 269 6
- DTR : TIOPA 2010 Section 42 472
- CTA study material 453
- Sect 102 TMA 1970 328
- Pre incorp expenses 305
- Relief on French Tax Deposit? 261
- Anyone have clients that use Pay4Later to offer customers credit? 249
- What is the tax position if I am working overseas but via a UK agency? 202
- Gift Aid after 5 April, before 31 Jan - Tax Credits 151
- Anybody have that old ACCA Student Training Record (STR1) 135
- Taxation of partners in an LLP following new rules 130