Corporation Tax Act 2010 (c. 4)

Part 9 U.K. Leasing plant or machinery

Chapter 5 U.K. Sales of lessors: anti-avoidance provisions

435 Disregard of increases and decreases [F1 in certain amounts] U.K.

(1) This section applies if—

[F2 (a) an amount mentioned in subsection (1A) is to be ascertained for the purpose of determining a question as to the application of Chapter 3 or 4,]

(b) apart from this section, there would be a reduction or increase in any such amount,

(c) the reduction or increase arises directly or indirectly in consequence of, or otherwise in connection with, any arrangements, and

(d) the main purpose, or one of the main purposes, of the arrangements is to secure that there is a relevant tax advantage.

[F3 (1A) The amounts are—

(a) the relevant plant or machinery value,

(b) the value of plant or machinery falling within section 387(7) or 410(6),

(c) the relevant company's or partnership's income in the period of 12 months ending with the relevant day,

(d) the amount of PM,

(e) the amount of TWDV,

(f) the amount of any disposal value to be substituted by section 398G(3), and

(g) any underlying amount required to calculate or verify an amount mentioned in any of the preceding paragraphs.]

(2) There is a relevant tax advantage if (apart from this section)—

(a) any company would not be regarded for the purposes of any provision of Chapter 3 or 4 as carrying on a business of leasing plant or machinery (whether alone or in partnership),

(b) the amount of any income which any company is treated as receiving under any such provision would be reduced, F4 ...

(c) the amount of any expense which any company is treated as incurring under any such provision would be increased [F5 , or

(d) the amount of any disposal value to be substituted by section 398G(3) would be reduced.]

(3) For the purpose of determining the question as to the application of Chapter 3 or 4, the reduction or increase in the amount [F6 to be ascertained] must be ignored.

(4) In this section—

• “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions—

  (a)

  whether or not legally enforceable, and

  (b)

  whether or not the company for which the relevant tax advantage is intended to be secured is a party to the arrangements,

• “increase” includes an increase from nil, and

• “reduction” includes a reduction to nil.

Textual Amendments

F1 Words in s. 435 heading substituted (with effect in accordance with Sch. 6 para. 27 of the amending Act) by Finance Act 2011 (c. 11), Sch. 6 para. 18(6)

F2 S. 435(1)(a) substituted (with effect in accordance with Sch. 6 para. 27 of the amending Act) by Finance Act 2011 (c. 11), Sch. 6 para. 18(2)

F3 S. 435(1A) inserted (with effect in accordance with Sch. 6 para. 27 of the amending Act) by Finance Act 2011 (c. 11), Sch. 6 para. 18(3)

F4 Word in s. 435(2)(b) omitted (with effect in accordance with Sch. 6 para. 27 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 6 para. 18(4)(a)

F5 S. 435(2)(d) and word inserted (with effect in accordance with Sch. 6 para. 27 of the amending Act) by Finance Act 2011 (c. 11), Sch. 6 para. 18(4)(b)

F6 Words in s. 435(3) substituted (with effect in accordance with Sch. 6 para. 27 of the amending Act) by Finance Act 2011 (c. 11), Sch. 6 para. 18(5)