Part 2

Plant and machinery allowances
Chapter 17

Other anti-avoidance

Sale and leaseback: election for special treatment

Sale and leaseback: election for special treatment
227
1
Section 228 applies if—
a
B enters into a relevant transaction with S,
b
the plant or machinery—
i
is within section 216(1)(b) (sale and leaseback), ...
ii. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
c
the conditions set out in subsection (2) are met, and
d
B and S elect that section 228 should apply.
2
The conditions are—
a
that S incurred capital expenditure on the provision of the plant or machinery,
b
that the plant or machinery was unused and not second-hand at or after the time when it was acquired by S,
c
that the plant or machinery was acquired by S otherwise than as a result of a transaction to which section 217 or 218 applies,
d
that the relevant transaction is effected not more than 4 months after the first occasion on which the plant or machinery is brought into use by any person for any purpose, and
e
that S has not—
i
made a claim for an allowance under this Act in respect of expenditure incurred on the provision of the plant or machinery,
ii
made a tax return in which such expenditure is taken into account in determining his available qualifying expenditure for the purposes of this Part, or
iii
given notice of any such amendment of a tax return as provides for such expenditure to be so taken into account.
3
In subsection (2)(b) and (c), the references to the plant or machinery being acquired by S are, in a case where the relevant transaction between S and B falls within section 213(1)(c) (assignment), references to the making of the contract the benefit of which S assigns to B.
4
An election under this section—
a
must be made by notice to an officer of Revenue and Customs no later than 2 years after the date of the transaction, and
b
is irrevocable.
5
Nothing in—
a
section 42 of, or Schedule 1A to, TMA 1970 (claims and elections for income tax purposes), or
b
paragraphs 54 to 60 of Schedule 18 to FA 1998 (claims and elections for corporation tax purposes),
applies to such an election.
6
In subsection (4) “the date of the transaction” means the date of the sale, the making of the contract or the assignment referred to in section 213(1)(a) to (c).
Pt. 2 modified (24.2.2003) by Proceeds of Crime Act 2002 (c. 29), s. 458(1), Sch. 10 para. 12 (with Sch. 10 para. 17(1)); S.I. 2003/120, art. 2, Sch. (with arts. 3 4) (as amended (20.2.2003) by S.I. 2003/333, art. 14)
S. 45H(2) modified (with effect in accordance with s. 167 of the amending Act) by Finance Act 2003 (c. 14) , Sch. 30 para. 7
Pt. 2 restricted (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 4 para. 4 ; S.I. 2004/2575 , art. 2(1) , Sch. 1
Pt. 2 modified (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 9 paras. 9(2), 21(2) (with s. 38(2)); S.I. 2004/2575, art. 2(1) , Sch. 1
Pt. 2 restricted (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 9 paras. 10, 22 (with s. 38(2) ); S.I. 2004/2575 , art. 2(1) , Sch. 1
Words in Act substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 83(1); S.I. 2005/1126, art. 2(2)(h)
S. 227 heading heading substituted (with effect in accordance with Sch. 20 para. 6(19) of the amending Act) by Finance Act 2008 (c. 9), Sch. 20 para. 6(13)(b)
S. 227(1)(b)(ii) and preceding word omitted (with effect in accordance with Sch. 20 para. 6(19) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 20 para. 6(13)(a)
Words in s. 227(2)(c) substituted (with effect in accordance with Sch. 20 para. 6(19) of the amending Act) by Finance Act 2008 (c. 9), Sch. 20 para. 6(13)(b)
S. 227 heading substituted (with effect in accordance with Sch. 20 para. 6(19) of the amending Act) by Finance Act 2008 (c. 9), Sch. 20 para. 6(13)
Pt. 2 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 para. 19
Pt. 2 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 para. 35
Pt. 2 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 paras. 36, 37
Pt. 2 modified (21.7.2009) by Finance Act 2009 (c. 10), s. 24
Pt. 2 Ch. 17 heading substituted (8.4.2010) (with effect in accordance with Sch. 4 para. 5 to the amending Act) by Finance Act 2010 (c. 13), Sch. 4 para. 3
Pt. 2 modified (17.7.2013) by Finance Act 2013 (c. 29), s. 73(7)-(11) (with s. 73(6))
Pt. 2 modified (10.6.2021) by Finance Act 2021 (c. 26), s. 9(1)(a)