Conundrum - help please!

Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 🎆 🐘 🎆
A Ltd Co sublets from a separate company. There is no paperwork drawn up (!).
The sublet was on the agreement that the Ltd Co pays the stamp duty that the other company incurred in acquiring the lease.

So, the Stamp Duty is in the P&L for the Ltd Co as they had to pay it.
Clearly it's not stamp duty, because the Ltd Co wasn't chargeable to SD.
It IS a payment for business, that relates to a lease. But there was no paperwork drawn up (sigh).

IMO it has to be revenue, not capital - becaue the Ltd Co doesn't own a lease, so they don't have a capital item. But what is it and is it allowable for tax?

I'm reading up on lease premiums but I can't for the life of me see how to treat it in the accounts of the payer, I can only see the CG treatment for the recipient of the premium, so I'm none the wiser on that front.




  • anniem
    anniem Registered Posts: 1,326
    Ooooo Errrrrr! Me thinks you need to ask an accountant!!!!! :lol:
    FMAAT - AAT Licensed Member in Practice - Pewsey, Wiltshire
  • deanshepherd
    deanshepherd Registered Posts: 1,809
    Sounds like rent to me..
  • Hasan.Ahmet
    Hasan.Ahmet Registered Posts: 87 💫 🐯 💫
    Renting is not subject to SD.
  • Bluewednesday
    Bluewednesday Registered Posts: 1,624
    I would treat it as a revenue expense - rent like Dean has said because there is no paperwork to say that is a capital expense.
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 🎆 🐘 🎆
    Cheers folks. Yep, adding it to rent paid was my gut feel too, so that's what's happening.

    Don't you just love straight forward jobs?! :lol:

    Hasan - true, but the other company bought the lease and there was SD payable on it and they stipulated my client pay it.
  • burg
    burg Moderator, FMAAT, AAT Licensed Accountant Posts: 1,441
    Sounds like rent to me as well.

  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 🎆 🐘 🎆
    Cheers Ian.

    Job's all done. Phew. So much to do before I go away on holiday!

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