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Corporation Tax Act 2010

Corporation Tax Act 2010

2010 CHAPTER 4

Introduction

Part 9: Leasing plant or machinery

Chapter 2: Long funding leases of plant or machinery
Section 377: Lessee under long funding finance lease: limit on deductions

1154.This section, the first of those relating to lessees, limits the amount which a lessee of plant or machinery under a long funding finance lease may deduct in calculating its profits for corporation tax purposes. It is based on section 502I of ICTA.

1155.The amount which may be deducted is limited to the amounts which in accordance with GAAP fall to be shown in the lessee’s accounts as finance charges in respect of the lease (see subsections (2) and(3)).

1156.In certain circumstances in accordance with GAAP a long funding finance lease is treated as a loan for accounting purposes. This section applies as if such a lease were treated as a finance lease (see subsection (4)).

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