The following legal costs were incurred by a sole trader:
£
Re:
Employment contracts
1,000
Abortive work on prospective property purchase
2,000
Debt collection
750
3,750
What amount is allowable for computing taxable trading income?
The correct answer is £1,750.
£1,750 (1,000 + 750)
Explanation: Property purchase is capital in nature disallowed.
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