388Loan to buy plant or machinery for partnership useU.K.
(1)This section applies to a loan that is used for capital expenditure on the provision of plant or machinery to which subsection (2) applies.
(2)This subsection applies to plant or machinery if—
(a)it is in use for the purposes of a trade, profession or ordinary property business carried on by a partnership, and
(b)the partnership is entitled to a capital allowance or liable to a balancing charge in respect of it under section 264 of CAA 2001 (partnership using property of a partner) for the period of account in which the interest is paid.
(3)A partnership is treated as entitled to a capital allowance or liable to a balancing charge in respect of plant or machinery for a period of account (“the later period”) for the purposes of subsection (2)(b) if—
(a)it has been so entitled or liable for a previous period of account, and
(b)no disposal value has been brought into account in respect of it in the later period or any earlier period of account.
(4)In this section and sections 389 and 390—
“capital expenditure” has the meaning given in section 4 of CAA 2001,
“period of account” has the same meaning as in that Act (see section 6(2) to (6) of that Act), and
“ordinary property business” has the same meaning as in Part 2 of that Act (see section 16 of that Act).