Corporation Tax Act 2010 (c. 4)

Part 22 Miscellaneous provisions

Chapter 1 Transfers of trade without a change of ownership

Effect of Chapter in relation to transfers to which it applies

950 Transfers of trades involving business of leasing plant or machinery

(1) This section applies if the transferred trade is or forms part of a business of leasing plant or machinery which the predecessor or the successor carries on on the day of the transfer of that trade (“the transfer day”).

(2) If, on the transfer day, both the predecessor and the successor carry on the transferred trade otherwise than in partnership, section 948(1) to (4) does not apply unless—

(a) the principal company or companies of the predecessor immediately before the transfer are the same as the principal company or companies of the successor immediately afterwards, and

(b) if any such principal company is a consortium principal company, the following condition is met.

(3) The condition is that the ownership proportion in relation to the predecessor immediately before the transfer is the same as the ownership proportion in relation to the successor immediately afterwards (regardless of whether the members of each consortium are the same).

(4) If, on the transfer day, the predecessor or the successor carries on the transferred trade in partnership, section 948(1) to (4) does not apply unless—

(a) the predecessor ceases to carry on the whole of its trade, and

(b) that trade is a business of leasing plant or machinery which the predecessor carries on in partnership on the transfer day.

(5) If section 948(1) to (4) does not apply as a result of this section, the plant or machinery of the transferred trade is treated for the purposes of the Corporation Tax Acts as sold by the predecessor to the successor on the transfer day for its market value immediately before the transfer of the trade.

(6) In this section—

• “business of leasing plant or machinery”—

  (a)

  if the business is carried on otherwise than in partnership, has the same meaning as in section 387, and

  (b)

  if the business is carried on in partnership, has the same meaning as in section 410,

• “consortium principal company” means a company which is a principal company as a result of section 394,

• “market value”, in relation to plant or machinery, is to be read in accordance with section 437(9),

• “ownership proportion” has the same meaning as in section 394,

• “plant or machinery” has the same meaning as in Part 2 of CAA 2001, and

• “principal company” is to be read in accordance with section 393 or 394 (as the case may be).