Deduction for Sale and Lease back( taxation law: case study)
Date Submitted: 09/29/2003 05:09:12
Category: / Business & Economy / Accounting
Length: 7 pages (1994 words)
Category: / Business & Economy / Accounting
Length: 7 pages (1994 words)
Deduction for Sale and Lease back
The facts:
The issues
Whether company X could get deduction in respect of 2m of lease payment and whether Y could get deduction for depreciation of 2m in respect of the plant.
Advises to X
Are the factory and plant fixture?
Commissioner may argue that factory and plant consisted of fixtures, sale agreement is ineffective to vest any title in company Y. Therefore, the lease is ineffective to confer …
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…amp;gt;1.6875
Written Down Value<Tab/>13.3125
Year2 Depreciation<Tab/>1.4977
Written Down Value<Tab/>11.8148
Year3 Depreciation<Tab/>1.3292
Written Down Value<Tab/>10.4856
Year 4 Depreciation<Tab/>1.1796
Written Down Value<Tab/>9.3060
Conclusion for Y:
Based on the above calculation, Y Co Ltd can only claim depreciation of 1.69 million as at 30 June 2001.
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