Part 9Leasing plant or machinery
Chapter 4Sales of lessors: leasing business carried on by a company in partnership
Qualifying changes of ownership in relation to partner company
425Partner company's income and matching expense in different accounting periods
1
This section applies if on any day (“the relevant day”)—
a
a company carries on a business of leasing plant or machinery in partnership with other persons (see sections 410 to 414),
b
the company is within the charge to corporation tax in respect of the business, and
c
there is a qualifying change of ownership in relation to the company.
2
On the relevant day—
a
the company is treated as receiving an amount of income, and
b
the accounting period of the company ends.
3
The income—
a
is treated as a receipt of the company's notional business (see section 417(6)), and
b
is brought into account in calculating for corporation tax purposes the profits of that business for that accounting period.
4
On the day following the relevant day—
a
the company is treated as incurring an expense, and
b
a new accounting period of the company begins.
5
The expense—
a
is treated as an expense of the company's notional business, and
b
is allowed as a deduction in calculating for corporation tax purposes the profits of that business for that new accounting period.
6
This section is supplemented by sections 426 to 428.