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tax treatment of a lease on a pub

tax treatment of a lease on a pub

Have a client who has paid £25k for 10 years remaining on a pub lease from the brewery as well as paying a monthly rental.

Was going to capitalise the lease and write off over 10 years at £2.5k per year.

But how is the £25k paid treated from a tax viewpoint?  What tax relief do they get if any and when do they get it?

Have looked around various references but cant find the answer.



PS happy crimbo.


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25th Dec 2012 11:40

The payment of £25,000 is a

The payment of £25,000 is a Capital Asset, and as such does not qualify for deduction against the trading profits of the business.

In terms of the accounts, the asset shoud be capiltised, and written off over it's useful life - straight line usually being used.

In terms of Capital Gains Tax, it is a "wasting asset" - though there the asset does not waste evenly across its life - and there is a formula for working out how much is wasted each year.

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