Treatment of Leases for Corporation tax

[millertime]

Hi - One for the accountants!

I should know this but my memory is failing me. How do you treat the lease repayments & interest in getting to adjusted profit in a CT computation?

 

[Tenacious]

Lease payments are treated as a deduction from profit & lease interest is added back to profit.

 

[millertime]

Thanks

 

[mirmick]

Lease payments are treated as a deduction from profit & lease interest is added back to profit.

Thats not right. Lease payment is the capital element and can not be treated as deduction from profit. Interest paid on lease is deductible against profits.

 

[bazermc]

Thats not right. Lease payment is the capital element and can not be treated as deduction from profit. Interest paid on lease is deductible against profits.

OP is correct, leases a funky for ct purposes, the finance cost charged in the p&l must be added back but the actual lease repayment (interest and capital) is allowed for a deduction against income

 

[millertime]

Is the same rule true for income tax?

 

[Nige]

yes