PART XII SPECIAL CLASSES OF COMPANIES AND BUSINESSES
F1Chapter 5ASpecial rules for long funding leases of plant or machinery: corporation tax
Lessors under long funding finance or operating leases: avoidance etc
502GACases where ss. 502B to 502G do not apply: plant or machinery held as trading stock
1
Sections 502B to 502G do not apply in the case of a company which is or has been the lessor of any plant or machinery under a long funding lease if the following condition is met.
2
The condition is that any part of the expenditure incurred by the company on the acquisition of the plant or machinery for leasing under the lease—
a
is (apart from those sections) allowable as a deduction in calculating its profits or losses for the purposes of corporation tax, and
b
is so allowable as a result of the plant or machinery forming part of its trading stock.
3
For the purposes of this section the cases in which expenditure incurred by a company on the acquisition of any plant or machinery for leasing under a lease is allowable as such a deduction include any case where—
a
the company becomes entitled to the deduction at any time after the expenditure is incurred, and
b
the deduction arises as a result of the plant or machinery forming part of its trading stock at that time.
4
If—
a
at any time any of sections 502B to 502G has applied for determining the amounts to be taken into account in calculating the profits or losses of the company for the purposes of corporation tax, and
b
the condition in subsection (2) is met at any subsequent time,
those amounts, and any other amounts which (as a result of this section) are to be so taken into account, are subject to such adjustments as are just and reasonable.
5
All such assessments and adjustments of assessments are to be made as are necessary to give effect to subsection (4).
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