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Assignment of short lease |
See Also
Assets held on 31/03/82 | Chargeable gains summary | Disposals | Grant of lease from non wasting interest | Grant of lease from wasting interest
Select from the following headings:
Background | Developing the schedule | Completing the Schedule | Standard Sub-Schedules | Carry Forward | Related Errors
The schedule is similar to the chargeable gains schedule, Assets held on 31/03/82, however, special rules operate for a short lease as only a proportion of the original expenditure can be deducted from the sale proceeds. This is determined by a table of percentages so that more depreciation is deducted from the cost of the lease as it expires.
The schedule deals with acquisitions after 6 April 1965, which may be either pre or post March 1982.
The schedule is developed from the E schedule.
Some of the cells are described in more detail as follows:
Description
A description of the asset should be entered in the cell provided below the schedule title. This will then appear on the Chargeable gains summary schedule.
Expiry date
The user must put a note of the expiry date of the lease on the schedule. This is so that the software will restrict the original cost, as described above, in accordance with the statutory table (TCGA 1992 Sch 8).
Date of assignment
The date of disposal should be entered in the cell below the Date column heading in the format dd/mm/yyyy or mm/yyyy, as indexation is calculated with reference to the month of purchase and disposal.
Proceeds on assignment/Incidental selling costs
Where appropriate the sale proceeds should be linked through as a negative amount from the Fixed asset disposal schedule. Similarly, items identified on the income and expense analysis schedules should be linked through into the series of Incidental selling costs cells, which will reduce the disposal proceeds taken into account to derive the Net proceeds figure.
Date of acquisition
The date of acquisition should be entered in the cell below the Date column heading in the format dd/mm/yyyy or mm/yyyy. The software will calculate the indexation allowance based on the Retail Price Index (TCGA 1992 s 53(1)(b).
Acquisition cost/31 March 1982 market value
This requires the user to input the cost of the asset disposed of and the 31 March 1982 value where applicable. The software will then derive the disallowable amount of the original cost and market value to be deducted from the sales proceeds, and use these to compute the relevant indexation allowance on the higher of allowable cost or market value.
Incidental acquisition costs
Costs of acquisition would include professional fees or commissions, costs of conveyancing and advertising costs (TCGA 1992 s 38(1)(a) & (c)).
Any deduction claimed under CTA 2009 s63 in respect of a premium paid for the lease may also be entered here.
Gains rolled in
Enter any gains rolled over into the acquisition cost of the asset in the data entry cell provided.
Where an amount has been reinvested equating to the disposal proceeds less any incidental costs on disposal, any chargeable gain on the old asset is reduced to nil and the base cost of the new asset is reduced by the rolled over gain (TCGA 1992 s 152(1)).
Pre/Post 31 March 1982 enhancement expenditure
If there has been any enhancement expenditure in the period since acquisition, the user must input details of the amount and the date on which it was carried out (TCGA 1992 s 38(1)(b)).
Foreign tax paid
Where this data entry cell is completed, this will enable a Deduct foreign tax selector flag at the foot of the schedule, set by default to 'No', which may be changed in order to treat the foreign tax as a deduction. This can then be used to reduce the gain (TCGA 1992 s278) or increase the base cost if the gain is rolled over.
A further data entry cell, Foreign tax eligible for credit, will also be enabled.
This schedule has no standard supporting schedules.
This schedule does not carry forward.
Error | How to
solve it |
| Lease expries before disposal date! | The date that the lease is assigned to another party must be before the expiry date of the lease. |
| Not in period! | The date the asset was transferred must be before the end of the accounting period. For FY 2005 files and onwards where the asset was disposed of before the start of the accounting period it is possible to override the error where s.179 TCGA applies by means of a selector on the schedule. |
| Acquisition date is pre 31 Mar 1982! Insert market value | The market value as at 31 March 1982 must be entered into the appropriately named cell. |
| Acquisition date is after 31 Mar 1982! | A market value at 31 March 82 has been entered when it is not required (the asset was bought after 31 March 1982). This value should be removed. |
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