Part 2Trading income
F1Chapter 10ALeases of plant or machinery: special rules for long funding leases
Lessees under long funding finance leases
148GLessee under long funding finance lease: limit on deductions
(1)
This section applies for the purpose of calculating the profits of a person carrying on a trade, profession or vocation for a period of account in which the person is the lessee of any plant or machinery under a long funding finance lease.
(2)
In calculating the person's profits for the period of account,—
(a)
the amount deducted in respect of amounts payable under the lease,
must not exceed
(b)
the amounts which, in accordance with generally accepted accounting practice, fall (or would fall) to be shown in the person's accounts as finance charges in respect of the lease.
(3)
If the lease is one which, under generally accepted accounting practice, falls (or would fall) to be treated as a loan, subsection (2) applies as if the lease were one which, under generally accepted accounting practice, fell to be treated as a finance lease.