Finance leasing etc
104(1)The Treasury may make provision by regulations as to the application of this Schedule in relation to a company that is the finance lessor of an intangible asset that is the subject of a finance lease.
(2)The regulations may provide—
(a)that, notwithstanding that the asset is accounted for by the finance lessor as a financial asset, this Schedule shall apply as if the asset were an intangible fixed asset of the lessor and not a financial asset;
(b)that this Schedule shall apply as if the amount at which the asset is recognised in the finance lessor’s balance sheet were capitalised expenditure on an intangible fixed asset, but that—
(i)no election may be made under paragraph 10 (election for writing down on fixed rate basis) in respect of that amount; and
(ii)that amount is not to be treated as capitalised expenditure for the purposes of paragraph 39(1)(b) (roll-over relief in case of realisation and reinvestment: conditions to be met in relation to expenditure on other assets);
(c)that where an asset formerly recognised by the lessor for accounting purposes as an intangible fixed asset becomes subject to a finance lease (and accordingly comes to be accounted for as a financial asset) the value of the asset so created is recognised as realisation proceeds of the intangible fixed asset on the change of accounting treatment;
(d)that assets partially excluded from this Schedule by paragraph 78 to 81 (assets excluded except as regards royalties) are entirely excluded from this Schedule as regards the finance lessor if they are subject to a finance lease and are accounted for by the lessor as financial assets;
(e)for excluding from the regulations assets used by the finance lessee for the purposes of a trade or business in respect of which he is within the charge to income tax;
(f)that an intangible asset counts as an existing asset in the hands of the finance lessor if the finance lessee is—
(i)a company for whom the asset was the whole or part of an existing asset, or
(ii)a person who is a related party in relation to such a company.
(3)The regulations may contain such consequential, supplementary, incidental and transitional provision, including provision modifying the operation of other provisions of the Corporation Tax Acts, as appears to the Treasury to be appropriate.
(4)References in this paragraph to a finance lease—
(a)have the meaning they have for accounting purposes, and
(b)include hire-purchase, conditional sale or other arrangements if they are of a similar character to a finance lease.
(5)References to the finance lessor or finance lessee have a corresponding meaning.
(6)Regulations under this paragraph may be made so as to have effect from 1st April 2002.