9(1)Section 785C of ICTA (plant and machinery leases: capital receipts to be treated as income: interpretation) is amended as follows.U.K.
(2)In subsection (6), for “subsection (9)” substitute “ subsections (9) and (9A) ”.
(3)In subsection (9)—
(a)in paragraph (a), insert at the end “or”, and
(b)omit paragraph (c) (and the “or” before it).
(4)After subsection (9) insert—
“(9A)Where—
(a)a capital payment is an initial payment under a long-funding lease, and
(b)under section 61 of the Capital Allowances Act (disposal events and disposal values), the commencement of the term of the lease is an event that requires the lessor to bring a disposal value into account,
the capital payment is only “relevant” to the extent that it exceeds the disposal value.”
(9B)“Commencement”, “disposal value”, “initial payment”, “long funding lease” and “the term” have the same meaning as in Part 2 of the Capital Allowances Act.”
10(1)Section 809ZB of ITA 2007 (plant and machinery leases: capital receipts to be treated as income: interpretation) is amended as follows.U.K.
(2)In subsection (6), for “subsection (9)” substitute “ subsections (9) and (9A) ”.
(3)In subsection (9)—
(a)in paragraph (a), insert at the end “or”, and
(b)omit paragraph (c) (and the “or” before it).
(4)After subsection (9) insert—
“(9A)Where—
(a)a capital payment is an initial payment under a long-funding lease, and
(b)under section 61 of CAA 2001 (disposal events and disposal values), the commencement of the term of the lease is an event that requires the lessor to bring a disposal value into account,
the capital payment is only “relevant” to the extent that it exceeds the disposal value.”
(9B)“Commencement”, “disposal value”, “initial payment”, “long funding lease” and “the term” have the same meaning as in Part 2 of CAA 2001.”
11(1)The amendments made by paragraphs 9 and 10 have effect in relation to payments made under leases whose inception is on or after 13 November 2008 (subject to sub-paragraph (2)).U.K.
(2)In relation to payments made under leases whose inception is before 22 April 2009, section 785C(9A) of ICTA and section 809ZB(9A) of ITA 2007 (inserted by this Schedule) have effect as if, for the words following paragraph (b), there were substituted “ the capital payment is not “relevant” .