Part 9Leasing plant or machinery
Chapter 2Long funding leases of plant or machinery
Lessees under long funding operating leases
379Lessee under long funding operating lease
1
This section applies if a company is the lessee of any plant or machinery under a long funding operating lease for the whole or part of any period of account.
2
The deductions allowed in calculating the profits of the company for the period of account for corporation tax purposes are reduced.
3
The amount of the reduction is so much of the expected gross reduction in value over the term of the lease as is attributable to the period of account.
4
The expected gross reduction in value over the term of the lease is the starting value of the plant or machinery, less its expected end value.
5
For the meaning of “starting value”, see section 380.
6
The expected end value of plant or machinery is the amount which—
a
at the commencement of the term of the lease is expected to be its market value at the end of the term, or
b
if section 380(3) applies, would have been expected to be that value had that value been estimated at the commencement of the term.
7
The expected gross reduction in value over the term of the lease that is attributable to the period of account is found by apportioning that reduction on a time basis according to the proportion of the term of the lease that falls in the period of account.