Page 12 - Taxation F6

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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