Tx notes fa22 Final

June 2023 to March 2024 exams
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Alternatively the assessable premium may be computed as the full premium received less 2% 
of the premium for the number of years of the lease less one year:
Premium
xxx
Less: P x 2% x (n-1)
(x)
Assessable premium
xxx
 
Example 5 
Bill grants Richard a lease to a shop on 30 June 2022
Annual rent £5,000 due on 1 July 2022
Term 
20 years 
Premium
£60,000
Calculate the Property Income assessment for Bill in 2022/23
6.2.
 
Trading Profit deduction for traders 
Where a trader has paid a premium for a short lease he may deduct the following annual amount 
against his Trading profit in each of the years of the lease in which the property is used in the trade. 
This is in addition to any rental cost incurred: 
 
Example 6 
Using example 4 above, show the relief available to Richard for the premium paid.


=
Property Premium Income assessment on landlord
p.a.
Life of lease

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June 2023 to March 2024 exams
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7. Individual Savings Accounts (ISAs) 
7.1.
Individual Savings Accounts (ISAs) have for many years been the most common form of tax 
efficient investment. 
The main advantages of ISAs are:
(a)
Income is free of income tax.
(b)
Disposals of investments within an ISA are free from capital gains tax (CGT).
(c)
No minimum holding period - withdrawals can be made at any time.
(d)
The introduction of the savings income and dividend income nil rate bands have removed the 
main benefits to most taxpayers of investing in an ISA but still give advantage to taxpayers 
with larger amounts of such income and for taxpayers selling shares where they have already 
made full use of their annual exempt amount (see later notes on CGT).