Property Transactions and the Businessman

Article Abstract:

Often a businessman will acquire a leasehold interest in a plant or office. This capital expenditure will not normally rank for tax relief. After examining tax consequences, he may decide it is in his best interest to have a larger gross output and shorter lease. Improvements on dilapidated property may also be capital and therefore not qualify as a deduction. It is possible to use a third party, such as a pension fund, to circumvent this. Fixtures installed are questionable according to use in the trade. New building expenditures are categorized according to that which is machinery or plant and useable in the trade or that which is building which is a capital expenditure. Industrial buildings can have non-industrial use of less than twenty-five per cent. Examples are given.

United Kingdom, Investments, Tax policy

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Property and the Businessman - Benefits in Kind Aspects

Article Abstract:

Under Section 185, where living accommodation is provided to an employee, the employee is treated as being in receipt of emoluments of an amount equal to the value to him of the accommodation for the period. Under F.A. 1983, an additional charge is imposed. The charge is the cost of the accommodation in excess of 75,000 at the official rate of interest. The employee can reduce the assessable benefit by making a contribution. Under Section 33A, if any interest in the property is held by any relevant person, the additional charge is based on market value at that date rather than cost. Section 33(4) provides exceptions to the charge under Section 33.

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Change in Rules on Gilt Transactions for Building Societies

Article Abstract:

In effect as of February 23, Inland Revenue announced a change in the tax treatment applied to building societies' transactions in the gilt market. Gilt was not treated as a trading asset for building societies. The capital gain was tax-free if the gilt was sold after one year. After the change in the rules, gilt is regarded as part of the building societies' trading assets and gains on these assets will be treated as normal trading profits and be liable to corporation tax. This brings the building societies into line with the banks and more aggressive traders in the gilt market.

Safety and security measures, Corporate taxes, Corporations, Labor unions, Industry, Industries

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