Part 2Trading income
Chapter 4Trade profits: rules restricting deductions
Car or motor cycle hire
C150BF1Connected persons: application of section 48
1
This section applies where connected persons incur expenses on the hiring of the same car for the same period and—
a
section 48 would (but for this section) apply to the expenses of two or more of those persons, or
b
section 48 and section 56 of CTA 2009 would (but for this section and section 58B of that Act) each apply to the expenses of at least one of those persons.
2
This section only applies where one or more of the persons mentioned in subsection (1)(a) or (b) incurs the expenses under commercial arrangements (and such a person is referred to below as a “commercial lessee”).
3
In relation to the expenses mentioned in subsection (1) to which section 48 would (but for this section) apply, section 48 only applies to the following—
a
where there is one commercial lessee, any such expenses incurred by that lessee, and
b
where there is more than one, any such expenses incurred by the first commercial lessee in the chain of arrangements for the hiring of the car for the period.
4
In this section—
a
references to expenses incurred by a commercial lessee include expenses incurred in that or any other capacity, and
b
“commercial arrangements” means arrangements the terms of which are such as would reasonably have been expected if the parties to the arrangements had been dealing at arm's length.