Part 2Trading income

F1Chapter 10ALeases of plant or machinery: special rules for long funding leases

Lessors under long funding finance leases

148BLessor under long funding finance lease: exceptional items

(1)

This section applies for the purpose of calculating the profits of a person carrying on a trade for a period of account if he is or has been the lessor under a long funding finance lease.

(2)

This section has effect where a profit or loss (whether of an income or capital nature)—

(a)

arises to the person in connection with the lease, and

(b)

in accordance with generally accepted accounting practice falls to be recognised for accounting purposes in a period of account, but

(c)

would not, apart from this section, be brought into account in calculating the profits of the person.

(3)

The profit or loss is to be treated—

(a)

in the case of a profit, as income of the person that is attributable to the lease,

(b)

in the case of a loss, as a revenue expense incurred by the person in connection with the lease.

(4)

Any reference in this section to an amount falling to be recognised for accounting purposes in a period of account is a reference to an amount falling to be recognised for accounting purposes—

(a)

in the person's profit and loss account or income statement,

(b)

in the person's statement of recognised gains and losses or statement of changes in equity, or

(c)

in any other statement of items brought into account in computing the person's profits or losses for that period.