Corporation Tax Act 2009

Finance leasing

854 Finance leasing etc

(1) The Treasury may make provision by regulations as to the application of this Part in relation to a company that is the finance lessor of an intangible asset that is the subject of a finance lease.

(2) Section 855 is about the provision that the regulations may make.

(3) References in this section and that section 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.

(4) References to the finance lessor or finance lessee have a corresponding meaning.

(5) Regulations under this section may be made so as to have effect from 1 April 2002.

855 Further provision about regulations under section 854

(1) Regulations under section 854 may provide that this Part applies as if the asset were an intangible fixed asset of the finance lessor and not a financial asset, even though the asset is accounted for by the finance lessor as a financial asset.

(2) The regulations may provide that this Part applies 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—

(a) no election may be made under section 730 (writing down at fixed rate: election for fixed-rate basis) in respect of that amount, and

(b) that amount is not to be treated as capitalised expenditure for the purposes of section 756(2) (roll-over relief in case of realisation and reinvestment: conditions to be met in relation to expenditure on other assets).

(3) The regulations may provide that if an asset formerly recognised by the finance lessor for accounting purposes as an intangible fixed asset becomes subject to a finance lease (and so 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.

(4) The regulations may provide that assets partially excluded from this Part by sections 810 to 813 or section 902 (assets excluded except as respects royalties) are entirely excluded from this Part as respects the finance lessor if they—

(a) are subject to a finance lease, and

(b) are accounted for by the finance lessor as financial assets.

(5) The regulations may provide for excluding from the regulations assets used by the finance lessee for the purposes of a trade or business in respect of which the finance lessee is liable to income tax.

(6) The regulations may provide that an intangible asset counts as a pre-FA 2002 asset in the hands of the finance lessor if the finance lessee is—

(a) a company for which the asset was the whole or part of a pre-FA 2002 asset, or

(b) a person who is a related party in relation to such a company.

(7) The regulations may make incidental, supplemental, consequential and transitional provision and savings.

(8) That provision may include modifications of the operation of other provisions of the Corporation Tax Acts.