Section 102 Deduction by reference to premium, etc paid in computation of profits for purposes of Schedule D, Cases I and II
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(1) In this section, "the relevant period" means-
(a) where the amount chargeable arose under section 98, the period treated in computing that amount as being the duration of the lease;
(b) where the amount chargeable arose under section 99, the period treated in computing that amount as being the duration of the lease remaining at the date of the assignment;
(c) where the amount chargeable arose under section 100, the period beginning with the sale and ending on the date fixed under the terms of the sale as the date of the reconveyance or grant, or, if that date is not so fixed, ending with the earliest date at which the reconveyance or grant could take place in accordance with the terms of the sale.
As a trader, do I get a taxation deduction in respect of a premium paid for my premises?
(1) If you are a lessee of a premises, and you have paid a premium for your lease, you can get a deduction for the premium when computing your trading or professional profits for tax purposes. However, you don't get it all in one go. Your deduction i...
(2) Where in relation to any premises an amount (in this section referred to as "the amount chargeable")―
(a) has become chargeable to tax under subsection (1), (2), (3), (4) or (5) of section 98 or under section 99 or 100, or
(b) would have become so chargeable but for section 103(3) or any exemption from tax,
and during any part of the relevant period the premises are wholly or partly occupied by the person for the time being entitled to the lease, estate or interest as respects which the amount chargeable arose for the purposes of a trade or profession carried on by such person, such person shall be treated, for the purpose of computing the profits or gains of the trade or profession for assessment under Case I or II of Schedule D, as paying in respect of the premises rent for any part of the relevant period during which the premises are occupied by such person (in addition to any rent actually paid) of an amount which bears to the amount chargeable the same proportion as that part of the relevant period bears to the whole, and such rent shall be taken as accruing from day to day.
How much of a premium can I claim as a trading expense?
(2) As a trader or professional person, if you pay a premium (section 98) or a deemed premium (sections 99, 100), your tax deduction is restricted to that part of the premium on which the grantor of the premium is taxed under Schedule D Case V. Furth...
(3) Where the amount chargeable arose under section 98(2) by reason of an obligation which included the incurring of expenditure in respect of which any allowance has been or will be made under Part 9, this section shall apply as if the obligation had not included the incurring of that expenditure and the amount chargeable had been calculated accordingly.
Must I exclude "capital" expenditure from the part of a premium I treat as a trading expense?
(3) Yes. The premium you pay for a lease may be increased by the value of any work you must undertake (section 99), i.e., your landlord is taxed on the benefit of your work. In such a case, you do not get a deduction for any element of capital expend...
(4) Where the amount chargeable arose under section 100 and the reconveyance or grant in question takes place at a price different from that taken in calculating that amount or on a date different from that taken in determining the relevant period, subsections (1) to (3) shall be deemed to have applied (for all relevant years of assessment) as they would have applied if the actual price or date had been so taken and such adjustments of liability to tax shall be made, by means of additional assessment or otherwise, as may be necessary.
Can I get a business deduction in respect of a deemed premium arising on the sale of a property with a right to reconveyance?
(4) The reconveyance (section 100) occurs at a price different than anticipated, resulting in tax overpaid, the spreading of the deduction over the relevant period is calculated by reference to the revised price.
