Taxation of Chargeable Gains Act 1992

[F1 25A Long funding leases of plant or machinery: deemed disposals U.K.

(1) This section applies where plant or machinery is used for the purpose of leasing under a long funding lease.

(2) The lessor shall be deemed for all purposes of this Act—

(a) to have disposed of the plant or machinery at the commencement of the term of the lease at the value described in subsection (4)(a) or (b), and

(b) to have immediately reacquired it at the same value.

(3) The lessor shall also be deemed for all purposes of this Act—

(a) to have disposed of the plant or machinery on the termination of the lease for a consideration equal to the termination amount, and

(b) to have immediately reacquired it for the same consideration.

(4) The value mentioned in subsection (2)(a) is—

(a) where the lease is a long funding finance lease, an amount equal to that which would fall to be recognised as the lessor's net investment in the lease if accounts were prepared in accordance with generally accepted accounting practice on the date on which the lessor's net investment in the lease is first recognised in the books or other financial records of the lessor [F2 (“the relevant date”)], or

(b) where the lease is a long funding operating lease, an amount equal to the market value of the plant or machinery at the commencement of the term of the lease.

[F3 (4A) The following provisions apply for the purposes of subsection (4)(a).

(4B) Treat any rentals under the lease made (or due) on or before the relevant date as made (and due) on the day after that date.]

[F4 (4C) Treat the lessor as having no liabilities of any kind at any time on the relevant date (but only if the effect of doing so would be to increase the amount calculated under subsection (4)(a)).

(4D) For the purposes of subsection (4C) “liabilities” includes, where the lessor is a company, any share capital issued by the company which falls to be treated for accounting purposes as a liability.]

(5) For the purposes of this section, the following expressions have the meaning given in Chapter 6A of Part 2 of the Capital Allowances Act (interpretation of provisions about long funding leases)—

• “commencement”, in relation to the term of a lease,

• “lessor”,

• “long funding lease”,

• “long funding finance lease”,

• “long funding operating lease”,

• “market value”,

• “the term”, in relation to a lease,

• “termination”,

• “termination amount”.]

Textual Amendments

F1 S. 25A inserted (with effect in accordance with Sch. 9 para. 4(2) of the amending Act) by Finance Act 2006 (c. 25), Sch. 9 para. 4(1)

F2 Words in s. 25A(4)(a) inserted (with effect in accordance with Sch. 20 para. 5(5) of the amending Act) by Finance Act 2008 (c. 9), Sch. 20 para. 5(2)

F3 S. 25A(4A)(4B) inserted (with effect in accordance with Sch. 20 para. 5(5) of the amending Act) by Finance Act 2008 (c. 9), Sch. 20 para. 5(3)

F4 S. 25A(4C)(4D) inserted (with effect in accordance with Sch. 20 para. 5(6) of the amending Act) by Finance Act 2008 (c. 9), Sch. 20 para. 5(4)