Part 2

Plant and machinery allowances
Chapter 17

Anti-avoidance

Sale and finance leasebacks

Restriction on B’s qualifying expenditure
224
1
If plant or machinery is the subject of a sale and finance leaseback the amount, if any, by which B’s expenditure under the relevant transaction exceeds D is to be left out of account in determining B’s available qualifying expenditure.
D is defined in subsections (2) and (3).
2
If S is required to bring a disposal value into account under this Part because of the relevant transaction, D is that disposal value (determined in accordance with section 222).
3
If S is not required to bring a disposal value into account under this Part because of the relevant transaction, D is whichever of the following is the smallest—
a
the market value of the plant or machinery;
b
if S incurred capital expenditure on the provision of the plant or machinery, the notional written-down value of that capital expenditure;
c
if a person connected with S incurred capital expenditure on the provision of the plant or machinery, the notional written-down value of that capital expenditure.
4
In this section “the notional written-down value”, in relation to expenditure incurred by a person on the provision of plant or machinery, has the meaning given by section 222(3).
5
This section does not apply if the finance lease or any transaction or series of transactions of which it forms a part makes provision such as is described in section 225(1).