435Disregard of increases and decreases in balance sheet amounts
(1)This section applies if—
(a)for the purpose of determining a question as to the application of Chapter 3 or 4 regard must be had to amounts (if any) which fall (or would fall) to be shown in any balance sheet of any company in respect of plant or machinery,
(b)apart from this section, there would be a reduction or increase in any such amount,
(c)the reduction or increase arises directly or indirectly in consequence of, or otherwise in connection with, any arrangements, and
(d)the main purpose, or one of the main purposes, of the arrangements is to secure that there is a relevant tax advantage.
(2)There is a relevant tax advantage if (apart from this section)—
(a)any company would not be regarded for the purposes of any provision of Chapter 3 or 4 as carrying on a business of leasing plant or machinery (whether alone or in partnership),
(b)the amount of any income which any company is treated as receiving under any such provision would be reduced, or
(c)the amount of any expense which any company is treated as incurring under any such provision would be increased.
(3)For the purpose of determining the question as to the application of Chapter 3 or 4, the reduction or increase in the amount which falls (or would fall) to be shown in the balance sheet in respect of plant or machinery must be ignored.
(4)In this section—
“arrangements” includes any agreement, understanding, scheme, transaction or series of transactions—
(a)whether or not legally enforceable, and
(b)whether or not the company for which the relevant tax advantage is intended to be secured is a party to the arrangements,
“increase” includes an increase from nil, and
“reduction” includes a reduction to nil.