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A surgical procedure

18 April 2007
Issue: 4104 / Categories: Forum & Feedback

We have recently taken over a client where a surgery property is owned equally by three individuals: two practising doctors (GPs) and one outside party (non-GP). The surgery was acquired some ten years ago and the full cost of the surgery property is shown in the partnership surgery accounts with the full related loan. The accounting year end of the medical practice is 30 June. The one-third interest of the owner who is not a GP is adjusted via a capital account each year for capital loan repayments/notional rent received and loan interest paid.

We have recently taken over a client where a surgery property is owned equally by three individuals: two practising doctors (GPs) and one outside party (non-GP). The surgery was acquired some ten years ago and the full cost of the surgery property is shown in the partnership surgery accounts with the full related loan. The accounting year end of the medical practice is 30 June. The one-third interest of the owner who is not a GP is adjusted via a capital account each year for capital loan repayments/notional rent received and loan interest paid. We understand that this individual discloses this income/expenditure on the property pages of his self- assessment return each tax year.
In the first seven years loan interest (approximately £60 000 in total) exceeded notional rent (£30 000 in total) paid to the surgery by the National Health Service. Excess loan interest arising in the...

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