Section 436: Balance sheet amounts determined on assumption company has no liabilities
1309.This section is an anti–avoidance provision. It is based on paragraph 38B of Schedule 10 to FA 2006.
1310.The section targets situations where the amount shown in a company’s balance sheet in respect of plant or machinery is affected by the liabilities of the company.
1311.It applies if, apart from this section, on any day:
no amount would fall to be shown in the company’s balance sheet in respect of plant or machinery (see subsection (2)); or
the amount which would fall to be shown in the balance sheet of the company in respect of plant or machinery is less than the amount which would fall to be shown on the assumption that the company had no liabilities of any kind on that day (see subsections (3) and (4)).
1312.In either of those cases, a question as to the application of Chapter 3 or 4 is to be answered applying the assumption that the company had no liabilities of any kind on that day (see subsection (5)).
