My client has received a substantial sum from their landlord in return for surrendering their lease. Am I right to say that this is compensation and therefore a capital receipt, taxable at the current rate of corporation tax. Presumably we can deduct the legal fees incurred?
Euan Wallace
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Call it a capital receipt derived from land
If your corporate client is now right out of the picture, with no new lease being granted to it, then the matter is as straightforward as you state. I do not see why associated legals are not a valid deduction from what is a capital gain.