Page 6 - F6 - Capital Allowances - Leases

Solution

 Leasehold improvements allowance :

Year ended 30 June 2014 - No allowance, since the

factory was not completed during the year of

assessment.

Year ended 30 June 2015 - Factory completed 31 March

2015. Lease expires 18¾ years after completion.

Therefore the value of the improvements stipulated in

the lease is to be amortised over a period of 18¾ years,

but must be reduced since the buildings were brought

into use only on 31 March.