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.