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
- Purchase of shares and goodwill 176 5
- How will auto enrolment affect accountants? 1,491 41
- Directors Remunerations and Employees on CT600 123 1
- Anyone Heard of This Outfit? 321 1
- How can I tell what returns are outstanding on HMRC online? 242 3
- Practice management - that old chestnut....... 1,241 19
- Suppliers for Online Card Payments? 378 6
- Go Cardless 392 10
- Self assessment tax arrears 346 3
- Mehjoo 340 2
- Tax Return Member LLP 168 1
- How to prove income for a mortgage if you have no SA302s 432 5
- Amazon Fees, Sage VAT/Tax code T20? 202 4
- SA302 353 7
- US Employment Income - Double Tax Treaty 299 13
- Bringing money to Uk 308 4
- Capital Allowances on Furnished Holiday Lets Business 224 4
- Hmrc software 268 3
- What expenses can be claimed after a move to Cornwall? 216 1
- Hosted email exchange 198 5
- Xtuple 526
- Qtac payroll for bureau 358
- Confused - Professional Association a Mutual trader, or not? 302
- Industrial & Provident Societies 295
- Data transfer from Sage Line 50 to VT Transaction+ 239
- Why would HMRC offer to close an investigation by contract settlement 218
- VAT Payable on Expenses for Non-VAT Registered Ltd Co 218
- Domain name sale and limited company 185
- CIS schemes 182
- Director legal fees in loose connection to the company 158