Lease Tax Computation Extract for Corporation Tax
Generate a tax computation extract showing the impact of FRS 102 lease accounting on your Corporation Tax.
Lease Classification
HMRC classifies leases as General Lease (rent deduction) or Long Funding Lease (capital allowances).
Tax Adjustments
Add back depreciation and interest, deduct rent paid.
Sample Adjustment
Dilapidations provisions
Where a lease carries a discounted dilapidations provision, the extract also shows the movements on it for the year: the unwinding of the discount, and any revision you took to profit or loss. They appear in their own Provision Movements column, with a note under the table. They are shown for you to consider and are deliberately NOT included in the net adjustment. Depreciation and interest are added back because tax does not follow the lease accounting model for an ordinary lease; a provision under Section 21 is not part of that model and would be recognised whatever the lease treatment. HMRC treats the unwinding of the discount as a further provision rather than a finance cost, and outside the loan relationship rules, so it follows the dilapidations obligation itself. That means it is allowable so far as the work is repairs and making good, and not allowable so far as it is capital, such as rebuilding or removing your own additions. Each lease turns on its own facts, which is why Lease102 gives you the figure and leaves the judgement to you.
FRS 102 Reference: HMRC BIM46525, BIM46510, BIM43251, BIM43255