One of my clients has just signed a 15 year lease to rent the premises that we are in, and has incurred professional fees and stamp duty fees (payable on the rent on the lease) totalling £3000.
I intend to capitalise the £3000 and depreciate it over the life of the lease. I am unsure though as to whether capital allowances be claimed for this expense? Also, are there any balance sheet entries that are needed to reflect the fact that we have entered a lease? Or do I just post the monthly rental to rent payable?
Hi
You say one of your cients but then say the premises 'we are in'.
There is simply not enough info without knowing more about/seeing the lease (not all leases are equal!), although substance over form comes to mind and could come into play. You would be well to determine this before you do anything with regards to the fees - suggest you get the advice of an Accountant.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
How can you depreciate something that isn't on the balance sheet? CA depends, as per what Joanne has said. Type of lease dictates the depreciation. Type of lease dictates whether the depreciation is allowable for tax (Alien I know). Is there any VAT?
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
