Part 2

Plant and machinery allowances
Chapter 17

Anti-avoidance

Sale and leaseback or sale and finance leaseback: election for special treatment

Effect of election: relaxation of restriction on B’s qualifying expenditure, etc.
228
1
The effect of an election under section 227 in relation to B is that subsections (2) and (3) apply instead of section 218 or 224 (restriction on B’s qualifying expenditure).
2
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.
3
D is whichever of the following is the smaller—
a
if S incurred capital expenditure on the provision of the plant or machinery, the amount of that expenditure;
b
if a person connected with S incurred capital expenditure on the provision of the plant or machinery, the amount of that expenditure.
4
Nothing in subsections (1) to (3) prevents section 225 from applying.
5
The effect of an election under section 227 in relation to S is—
a
that no allowance is to be made to S under this Act in respect of the capital expenditure on the provision of the plant or machinery, and
b
that the whole of that expenditure must be left out of account in determining the amount for any period of Ss' available qualifying expenditure for the purposes of this Part.