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
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