Corporation Tax Act 2010 (c. 4)

Part 9 U.K. Leasing plant or machinery

Chapter 4 U.K. Sales of lessors: leasing business carried on by a company in partnership

Qualifying changes of ownership in relation to partner company U.K.

425 Partner company's income and matching expense in different accounting periods U.K.

(1) This section applies if on any day (“the relevant day”)—

(a) a company carries on a business of leasing plant or machinery in partnership with other persons (see sections 410 to 414),

(b) the company is within the charge to corporation tax in respect of the business, and

(c) there is a qualifying change of ownership in relation to the company.

(2) On the relevant day—

(a) the company is treated as receiving an amount of income, and

(b) the accounting period of the company ends.

(3) The income—

(a) is treated as a receipt of the company's notional business (see section 417(6)), and

(b) is brought into account in calculating for corporation tax purposes the profits of that business for that accounting period.

(4) On the day following the relevant day—

(a) the company is treated as incurring an expense, and

(b) a new accounting period of the company begins.

(5) The expense—

(a) is treated as an expense of the company's notional business, and

(b) is allowed as a deduction in calculating for corporation tax purposes the profits of that business for that new accounting period.

(6) This section is supplemented by sections 426 to 428.