2(1)Schedule 10 to FA 2006 (sale etc of lessor companies etc) is amended as follows.U.K.
(2)In paragraph 1(4) (contents of Schedule), for “an anti-avoidance provision” substitute “ ;anti-avoidance provisions ”.
F1(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4)After paragraph 38 insert—
“38A(1)This paragraph applies if—
(a)a question arises as to the application of this Schedule,
(b)for the purpose of determining that question regard must be had to amounts (if any) which fall (or would fall) to be shown in any balance sheet of any company in respect of plant or machinery,
(c)there would (but for this paragraph) be a reduction or increase in any such amount,
(d)the reduction or increase arises directly or indirectly in consequence of, or otherwise in connection with, any arrangements, and
(e)the main purpose, or one of the main purposes, of the arrangements is to secure that there is a relevant tax advantage.
(2)There is a relevant tax advantage if (but for this paragraph)—
(a)any company would not be regarded for the purposes of any provision of this Schedule 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 provision of this Schedule would be reduced, or
(c)the amount of any expense which any company is treated as incurring under any provision of this Schedule would be increased.
(3)For the purpose of determining any question which arises as to the application of this Schedule, the reduction or increase in the amount which falls (or would fall) to be shown in the balance sheet in respect of plant or machinery is to be ignored.
(4)For the purposes of this paragraph and paragraph 38B a question arises as to the application of this Schedule if a question arises—
(a)as to whether any company carries on a business of leasing plant or machinery (whether alone or in partnership) for the purposes of any provision of this Schedule, or
(b)as to the amount (if any) of any income or expense which any company is treated as receiving or incurring under any provision of this Schedule.
(5)In this paragraph—
“arrangements” includes any agreement, understanding, scheme, transaction or series of transactions—
whether or not legally enforceable, and
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.
38B(1)This paragraph applies if—
(a)a company owns any plant or machinery at any time on any day (“the relevant day”),
(b)a question arises as to the application of this Schedule,
(c)for the purpose of determining that question regard must be had to the amount (if any) which falls (or would fall) to be shown in any balance sheet of the company in respect of the plant or machinery, and
(d)condition A or B is met.
(2)Condition A is met if there would (but for this paragraph) be no amount which would fall to be shown in the balance sheet of the company in respect of the plant or machinery.
(3)Condition B is met if the amount which (but for this paragraph) would fall to be shown in the balance sheet of the company in respect of the plant or machinery is less than the amount which, on the relevant assumption, would fall to be so shown.
(4)For the purpose of determining any question which arises as to the application of this Schedule, the amount which falls (or would fall) to be shown in any balance sheet of the company in respect of the plant or machinery is to be determined on the relevant assumption (as well as on the other assumptions applicable under other provisions of this Schedule).
(5)The relevant assumption is that the company has no liabilities of any kind at any time on that day.
(6)For this purpose “liabilities” includes any share capital issued by the company which falls to be treated for accounting purposes as a liability.”
(5)For the purposes of Schedule 10 to FA 2006 the amendments made by sub-paragraphs (3) and (4) have effect in relation to—
(a)any qualifying change of ownership in relation to a company which occurs on or after 22nd November 2006, and
(b)any qualifying change in a company's interest in a business which occurs on or after that date.
(6)For all other purposes those amendments have effect for the purpose of determining whether a company carries on a business of leasing plant or machinery (whether alone or in partnership) on or after that date.
Textual Amendments
F1Sch. 6 para. 2(3) omitted (with effect in accordance with Sch. 31 para. 12 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 31 para. 11