Page 22 - F6 Slide - Taxation - Lecture Day 2 Class
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Special Inclusions
• Leasehold improvements
• Includes the value of the improvements effected on the land or buildings
of the lessor.
• There must be an agreement obliging the lessee to effect improvements.
• The inclusion is when the improvements are completed.
• The amount to be included in the GI of the lessor is the amount stipulated
in the contract.
• If there is no amount that is included in the contract the fair and
reasonable value of the improvements.
• If the lessee volunteers an additional amount =no inclusion in the GI.
• Even if the lessee for example spends 600 000 and the amount stipulated
in the contract is 500 000 the amount included will be 500 000.
• If the lessor specifies the improvements to be build the = fair and
reasonable amount of the improvements will be included in the GI.
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