(1)This section applies where a person disposes of an asset—
(a)which includes plant or machinery which is a fixture for the purposes of Chapter 6A of Part 2 of the Capital Allowances Act, and
(b)which he has used for the purpose of leasing under one or more long funding leases.
(2)In the computation of the amount of a loss accruing to the person on the disposal there shall be excluded from the sums allowable as a deduction by virtue of section 38(1)(a) and (b) (acquisition and enhancement costs) an amount determined in accordance with subsection (3) or (4).
(3)Where the person has used the plant or machinery for the purpose of leasing under one long funding lease, the amount is equal to the fall in value of the plant or machinery during the period of the lease.
(4)Where the person has used the plant or machinery for the purpose of leasing under more than one long funding lease, the amount is equal to the sum of the fall in value of the plant or machinery during the period of each lease.
(5)In this section, references to the fall in value of plant or machinery during the period of a lease are references to the amount (if any) by which—
(a)the market value of the plant or machinery at the commencement of the term of the lease,
exceeds
(b)its market value at the termination of the lease.
(6)For the purposes of this section, the following expressions have the meaning given in Chapter 6A of Part 2 of the Capital Allowances Act (interpretation of provisions about long funding leases)—
“commencement”, in relation to the term of a lease,
“long funding lease”,
“market value”,
“the term”, in relation to a lease,
“termination”.]
Textual Amendments
F1S. 41A inserted (with effect in accordance with Sch. 9 para. 5(2) of the amending Act) by Finance Act 2006 (c. 25), Sch. 9 para. 5(1)