Part 13Tax avoidance

F1Chapter 6Avoidance involving leases of plant and machinery

809ZAPlant and machinery leases: capital receipts to be treated as income

(1)

This section applies if—

(a)

there is an unconditional obligation, under a lease of plant or machinery or a relevant arrangement, to make a relevant capital payment (at any time), or

(b)

a relevant capital payment is made under such a lease or arrangement otherwise than in pursuance of such an obligation.

(2)

The lessor is treated for income tax purposes as receiving income attributable to the lease of an amount equal to the amount of the capital payment.

F2(3)

If subsection (1)(a) applies, the income is treated as income for the period of account in which there is first an obligation of the kind mentioned there.

(4)

If subsection (1)(b) applies, the income is treated as income for the period of account in which the capital payment is made.

(5)

For the meaning of “capital payment” and “relevant capital payment”, see section 809ZE.

(6)

For the meaning of other expressions used in this section or section 809ZC, 809ZD or 809ZE, see section 809ZF.