PART XVII TAX AVOIDANCE
CHAPTER VI MISCELLANEOUS
Other provisions
F1785BPlant and machinery leases: capital receipts to be treated as income
(1)
This section applies if—
(a)
there is an unconditional obligation, under a lease of plant or machinery or a relevant arrangement, to make a relevant capital payment (at any time), or
(b)
a relevant capital payment is made under such a lease or arrangement otherwise than in pursuance of such an obligation.
(2)
The lessor is treated for corporation tax purposes as receiving income attributable to the lease of an amount equal to the amount of the capital payment.
(3)
The income is treated—
(a)
if subsection (1)(a) applies, as income for the period of account in which there is first an obligation of the kind mentioned there, and
(b)
if subsection (1)(b) applies, as income for the period of account in which the payment is made.