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Stamp Duty on Lease

Stamp Duty on Lease

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Can someone help please with the tax treatment of the payment of stamp duty on a new lease. Paragraph.  It seems to be capital expenditure of some sort but has no resaleable value particularly if the lease runs its full term and doesn't seem to be similar to a lease premium where there is a measure of tax relief.  Paragraph.  Thanks in advance for any help.

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By MBK
05th Aug 2013 12:29

If it's a new lease .....

... then the SDLT paid is capital expenditure.

In accounting terms you could:-

a) Put it through the P&L and add it back in the tax comp; OR

b) Treat it as a fixed asset and write it off over the period of the lease.

Because the expenditure is capital the expense will be relievable at the time of disposal of the lease. So it will either give rise to a capital loss at that time, or be deducted from any premium received.

I'm assuming here that the lease is for less than 50 years.

 

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07th Aug 2013 11:43

Stamp Duty

Thanks MBK.  Paragraph.  It's a 10 year lease and, as I feared, there's no tax relief available at the end of the lease other than a capital loss to be either offset against gains (unlikely) or carried forward (again unlikely to be relieved).

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