Part 19Sale and lease-back etc
Chapter 4Leased assets: capital sums
Application of the Chapter
871Application of the Chapter
This Chapter applies if—
a
condition A is met (see section 872), and
b
condition B, C, D or E is met (see section 873).
872Payment under lease
1
Condition A is that—
a
a payment is made under a lease of a relevant asset, and
b
the payment is one for which a deduction by way of relevant tax relief is allowed.
2
Condition A is not met if section 865 (leased trading assets: tax deductions)—
a
applies to the payment, or
b
would apply to it but for its being excluded under section 866 (long funding finance leases).
3
Condition A is not met if section 681CC of ITA 2007 (provision for income tax corresponding to section 865)—
a
applies to the payment, or
b
would apply to it but for its being excluded under section 681CD of that Act (long funding finance leases).
4
The reference in subsection (1)(a) to a lease does not include a lease created on or before 14 April 1964.
873Sum obtained
1
Condition B is that the person making the payment—
a
obtains a capital sum in respect of the lessee's interest in the lease, and
b
is a company within the charge to corporation tax.
2
Condition C is that an associate of the person making the payment—
a
obtains a capital sum by way of consideration in respect of the lessee's interest in the lease, and
b
is a company within the charge to corporation tax.
3
Condition D is that—
a
the lessor's interest in the lease, or any other interest in the asset, belongs to an associate of the person making the payment,
b
the associate obtains a capital sum in respect of the interest, and
c
the associate is a company within the charge to corporation tax.
4
Condition E is that—
a
the lessor's interest in the lease, or any other interest in the asset, belongs to an associate of the person making the payment,
b
an associate of that associate obtains a capital sum by way of consideration in respect of the interest, and
c
the associate obtaining the sum is a company within the charge to corporation tax.
5
Condition B, C, D or E may be met before, at or after the time when the payment is made.
6
Condition B or C is not met if—
a
the lease is a hire-purchase agreement for plant or machinery, and
b
the capital sum is required to be brought into account as the whole or part of the disposal value of the plant or machinery under section 68 of CAA 2001.
7
Condition D or E is not met if—
a
the capital sum is obtained in respect of the lessee's interest in the lease,
b
the lease is a hire-purchase agreement for plant or machinery, and
c
the capital sum is required to be brought into account as the whole or part of the disposal value of the plant or machinery under section 68 of CAA 2001.