SCHEDULES
SCHEDULE 32Leases of plant or machinery
Disposal values: commencement of long funding finance leases
1
1
Section 61 of CAA 2001 (disposal events and disposal values) is amended as follows.
2
In the Table in subsection (2), for item 5A substitute—
5A. Commencement of the term of a long funding finance lease of the plant or machinery.
The greater of—
- a
the market value of the plant or machinery at the commencement of the term of the lease, and
- b
the qualifying lease payments.
3
After subsection (5) insert—
5A
In item 5A of the Table “qualifying lease payments” means the minimum payments under the lease (including any initial payment), excluding the following—
a
so much of any payment as, under generally accepted accounting practice, falls (or would fall) to be treated as the gross return on investment in respect of the lease,
b
so much of any payment as represents charges for services, and
c
so much of any payment as represents qualifying UK or foreign tax (within the meaning of section 70YE) to be paid by the lessor.
4
Omit subsections (6) to (9).