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
- Goodwill gesture for providing work 411 12
- What would you do in this situation? 101 5
- Filing a P87 (professional fees) before year end. 121 2
- Recommendations for payroll/AE software? 598 13
- More HMRC on gov.uk 623 11
- Rollover relief - when does gain crystallise in this situation? 75 1
- Offshore company transferring assets to a UK individual. 339 14
- Interest Free Loan - Salay Sacrifice? 240 4
- Research and development - repayment timescale 216 5
- VAT reconciliation and VAT return on Sage 98 2
- Sole trader hid directorships. 380 6
- Halloween - do you celebrate it? 1,389 46
- Enquiry into tax return - how co-operative would you be? 300 5
- NOVA 549 1
- Clearing payments on account/ Sage 50 269 10
- Regional Development Grant 116 4
- Problem ex client...again.. 2,389 21
- Company car without a salary 227 2
- Charity donations 1,079 21
- Interest on HMRC contract settlement 149 2
- Bonus Bonds 390
- Insolvency and whistle blowing 377
- Transfer of funds into recently set up company 288
- TPR imposes first penalty notice fines 256
- Box 8 VAT Return - deposit payment 185
- Husband proposes to buy the car as Director unable to acess finance 171
- Finance Lease 155
- Company Car Lease 152
- Form 42 147
- Demerger Reserve 129