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Capitalised leased assets |
See Also
Adjustment of profit | Capitalised leased assets summary | Disposals | Expense analysis | Fixed assets | Profit and loss account / Income statement (D schedule) | UK property business analysis | UK property income
Select from the following headings:
Background | Developing the schedule | Completing the Schedule | Standard Sub-Schedules | Carry Forward | Related Errors
Note: The usage of this schedule has changed from 2007 onwards.
2007 onwards
This schedule supports the analysis of interest charged and lease payments under "old" finance leases outside of the SP3/91 rules, those entered into before 11 April 1991. The analysis of depreciation allowed under SP3/91 on "new" finance leases is dealt with on the Capitalised leased assets summary schedule.
2006 and earlier
This schedule supports adjustments for finance leased assets following both the SP3/91 and pre-SP3/91 methods. There are separate columns for assets following each of the treatments and a cell to enter the commercial depreciation on assets. The NBV of assets following SP3/91 must be tracked separately on the Capitalised leased assets summary in order to compute any adjustment on disposal.
This schedule supports a row on an expense analysis schedule for the interest charge on capitalised leased assets. The charge is tied in to a movement on the leasing creditor.
The schedule is developed from the D schedule, an expense and income analysis or a UK property business analysis, from the Develop, Leasing menu.
2007 onwards
Enter the balance owed to lease creditors at the beginning of the year in Balance, beginning of period, (this will usually be disclosed separately in a note to the accounts). If the prior year computation has been produced on the software, the brought forward figure will have been carried forward automatically.
Enter the Additions. The total additions figure for the year will automatically cross check with the analysis of the movement on fixed assets on the C schedule.
Analyse the Finance charge and Lease payments for the year. These figures should not be net of any proceeds received from any disposal of capitalised leased assets. The finance charge and lease payments will be automatically adjusted for on the A schedule.
2006 and earlier
The schedule works as follows:
1. Develop the Capitalised leased assets schedule and analyse the finance
charge for the year between assets leased before and after 11 April 1991.
The finance charge will then be automatically disallowed on the A schedule for assets leased prior to 11 April 1991; for assets leased after this date, the company will get a deduction for the finance charge and allowable depreciation, as described below.
2. Enter the balance owed to lease creditors at the beginning of the year in the Balance, beginning of period cell (this will usually be disclosed separately in a note to the accounts).
If the prior year computation has been produced on the software the brought forward figure will have been carried forward automatically.
3. Enter the amounts of the lease payments made in the year in the Lease payments field. These figures should not be net of any proceeds received from any disposal of capitalised leased assets.
4. Enter the additions. The total additions figure for the year will automatically cross check with the analysis of the movement on fixed assets on the C schedule.
5. The "allowable depreciation" per SP3/91 should be entered at the bottom of the schedule in the Depreciation charged on leased assets acquired after 11/4/91 cell. It is assumed that this amount is included within the depreciation charge.
Disposals
Care should be taken when dealing with capitalised leased assets that have been disposed of during the year. The lease agreement will specify whether it is the lessor or the lessee who is entitled to any sale proceeds, any proceeds due to the lessee are to be included on the C1 schedule. These proceeds are treated as a refund of lease payments and are taxed accordingly on the 'A' schedule.
Investment companies
For investment companies, the net amounts allowable are treated as expenses of management.
Long periods of account
2007 onwards
For investment companies, the amount of lease payments entered needs to be further analysed to include the amounts allowable in each taxable period.
2006 and earlier
For long periods of account two payment rows are provided, one relating to each accounting period.
Property Companies
Where the schedule is developed from a UK property business analysis, any adjustments will be made on the UK property business schedule rather than on the A schedule.
Note: Under the Funding Lease proposals in Finance Bill following budget 2006, Capital allowances are available where assets are held under operating that are treated as funding leases. In this case the lessee (user) must disallow the capital element of the lease on the expense analysis where it appears. The finance element of the lease payment remains deductible.
2007 onwards
None.
2006 and earlier
The schedule has one standard sub-schedule, the Capitalised leased assets summary, which may be used to give additional accounting information about the leased assets.
On carry forward, this schedule is automatically developed in the subsequent computation if it is present in the prior year computation. In the subsequent computation, the balance for leased assets brought forward will be entered automatically.
None.
© 2009 Thomson Reuters.