PART XII U.K. SPECIAL CLASSES OF COMPANIES AND BUSINESSES

Valid from 19/07/2006

Chapter 5A U.K.Special rules for long funding leases of plant or machinery: corporation tax

[F1 Lessors under long funding finance leases] U.K.

Textual Amendments

F1 Pt. 12 Ch. 5A (ss. 502A-502L) inserted (with effect in accordance with Sch. 8 para. 15 of the amending Act) by Finance Act 2006 (c. 25), Sch. 8 para. 11

502B Lessor under long funding finance lease: rental earnings U.K.

(1) This section applies for determining for the purposes of corporation tax the profits of a company for any period of account in which it is the lessor of any plant or machinery under a long funding finance lease.

(2) The amount to be brought into account as the lessor's taxable income from the lease for the period of account is the amount of the rental earnings in respect of the lease for the period of account.

(3) The “rental earnings” for any period is the amount which, in accordance with generally accepted accounting practice, falls (or would fall) to be treated as the gross return on investment for that period in respect of the lease where it meets the finance lease test.

(4) If the lease is one which, under generally accepted accounting practice, falls (or would fall) to be treated as a loan in the accounts in question, so much of the rentals under the lease as fall (or would fall) to be treated as interest are to be treated for the purposes of this section as rental earnings.

Modifications etc. (not altering text)

C1 S. 502B excluded (21.7.2008) by Finance Act 2008 (c. 9), Sch. 20 para. 11(2)

C2 S. 502B excluded (21.7.2009) by Finance Act 2009 (c. 10), Sch. 33 para. 5