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Leasehold improvement - how is this taxed?

Posted 30 December 2013 under Tax Q&A


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Our company has to make improvements to our offices that we lease. I know we should account for these as leasehold improvements and amortize it over the lease period, but will this amortization be a tax deductible expense? (will the accounting and tax treatment be the same?) The total improvement will be less than R7 000 can I rather treat this as a "small items" deduction?

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TaxTim TaxTim says:
6 January 2014 at 9:45

Who is paying for these improvements?

Annie says:
13 January 2014 at 6:39

The lessee. (The company that I work for)

TaxTim TaxTim says:
13 January 2014 at 8:53

Leasehold improvements are not the same as normal wear and tear items of purchase. You are allowed to deduct the expense over the number of years it takes to build the improvement - so the total amount divided by the time period - per year is the deduction.


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