Parties often enter into leases of vacant commercial or industrial land, subject to payment of a "lease premium" by the lessee to the lessor. This is defined as "a consideration having an ascertainable money value passing from a lessee to a lessor - distinct from, and in addition to, or in lieu of, rent". It differs from rent in that it is paid in respect of the whole period of the lease. It is usually paid in a lump sum at the commencement of the lease.
Section 11(f) of the Income Tax Act contains the deduction for the lessee. The amount must be spread over the period of the lease, from commencement to end, including renewal periods, to a maximum spread of 25 years. You need to ensure that the leased asset is used for the production of income in order to qualify for this allowance.
Lease premium: R
Date lease starts:
Date lease stops:
Renewal period (if exists in contract):
Your financial year end:
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