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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3833
Experience:  FCCA FCMA CGMA ACIS
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Client (limited company) received monetary compensation for

Customer Question

Client (limited company) received monetary compensation for surrender of the shop lease, he has trading losses for the year and trading losses bought forward from previous years. If the lease was under section 37 of the landlord and tenants act 1954 presumably there would not be any Capital Gains implications?
If there is a CGT issue could this be offset against the trading losses for Corporation tax?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
However, I do need to know if the terms of the lease specifically provided for an early surrender.
On receipt of this information I can advise you further.
Customer: replied 2 years ago.

The property was required by the landlord for redevelopment so as far as I am aware a new lease was issued nothing in the original lease.

Expert:  bigduckontax replied 2 years ago.

We now need the Valuation Office Agency's report on how the sale proceeds should be apportioned. You will have to approach them for this data; they are part of HMRC's empire, the old District Valuer. Once this is available then the calculation can be undertaken.

Customer: replied 2 years ago.

Ok thanks. I look forward to hearing from you shortly.

Expert:  bigduckontax replied 2 years ago.
I await the DV's data; I'm an old fogy and sometimes think in outdated terms. When I started work as a Trainee Valuation Surveyor with the old London County Council over half a century ago now we had a lot of interplay with the DV, particularly on rating.
Customer: replied 2 years ago.

would it make a difference if there was a terms in the original lease for an early surrender?

Is it not compensation rather than a sale?

Expert:  bigduckontax replied 2 years ago.
Yes it would, which is why I asked in the first place. In both calculations the DV's figures are required.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

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