343ACompany reconstructions involving business of leasing plant or machinery

1

This section applies if the trade is or forms part of a business of leasing plant or machinery which the predecessor or the successor carries on on the day of cessation.

2

If, on the day of cessation, both the predecessor and the successor carry on the trade otherwise than in partnership, section 343(2) does not apply unless—

a

the principal company or companies of the predecessor immediately before the cessation are the same as the principal company or companies of the successor immediately afterwards, and

b

if any such principal company is a consortium principal company, the relevant fraction in relation to the predecessor immediately before the cessation is the same as the relevant fraction in relation to the successor immediately afterwards (irrespective of whether the members of each consortium are the same).

3

If, on the day of cessation, the predecessor or the successor carries on the trade in partnership, section 343(2) does not apply unless—

a

the predecessor ceases to carry on the whole of its trade, and

b

that trade is a business of leasing plant or machinery which the predecessor carries on in partnership on the day of cessation.

4

In any case where section 343(2) does not apply as a result of this section, the plant or machinery belonging to the trade shall be treated for the purposes of the Corporation Tax Acts as sold by the predecessor to the successor on the day of the cessation for an amount equal to its market value as at that day.

5

In this section—

• “business of leasing plant or machinery”—

  1. a

     has the same meaning as in Part 2 of Schedule 10 to the Finance Act 2006 (sale etc of lessor companies etc) (if the business is carried on otherwise than in partnership), and

  2. b

     has the same meaning as in Part 3 of that Schedule (if the business is carried on in partnership),

• “consortium principal company” means a company which is a principal company as a result of paragraph 12 of that Schedule,

• “market value”, in relation to plant or machinery, is to be construed in accordance with paragraph 41(8) of that Schedule,

• “plant or machinery” has the same meaning as in Part 2 of the Capital Allowances Act,

• “principal company” is to be construed in accordance with paragraph 11 or (as the case may be) 12 of Schedule 10 to the Finance Act 2006, and

• “relevant fraction” has the same meaning as in paragraph 12 of that Schedule.