Part 2 Plant and machinery allowances
F1Chapter 6AInterpretation of provisions about long funding leases
Meaning of “long funding lease” etc
70HLessee: requirement for tax return treating lease as long funding lease
(1)
A lease is not a long funding lease in the case of the lessee unless he makes a tax return for the initial period on the basis that he falls to be taxed in respect of the lease in accordance with the provisions of—
F2(a)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b)
Chapter 10A of Part 2 of ITTOIA 2005 (long funding leases: income tax) F3or
(c)
Chapter 2 of Part 9 of CTA 2010 (long funding leases of plant or machinery).
F4(1A)
Subsection (1) does not apply in respect of a lease of plant or machinery (“lease A”) if, at any time in the relevant period—
(a)
the lessee is the lessor of a lease of any of that plant or machinery (“lease B”), and
(b)
lease B is a long funding lease.
(1B)
In subsection (1A) “the relevant period” means the period—
(a)
beginning with the inception of lease A, and
(b)
ending with the making of the tax return for the initial period (or, if that return is amended, the making of the last amendment).
F5(1C)
In a case in which paragraphs (a) and (b) of subsection (1) of section 70DA (leaseback of plant or machinery) are satisfied, subsection (1) of this section does not apply to the lease referred to in section 70DA(1)(b).
(2)
Where, in the case of a lease, a person has made a tax return for the initial period—
(a)
on the basis that he falls to be taxed in respect of the lease in accordance with those provisions, or
(b)
on the basis that he does not fall to be so taxed,
he may not make a claim F6under the recovery provisions for relief in respect of an amount paid or liable to be paid that is excessive by reason of the tax return having been made on that basis.
(3)
In this section—
F7“the recovery provisions” means—
(a)
F8Schedule 1AB to the Taxes Management Act 1970; or
(b)
paragraph 51 of Schedule 18 to F9FA 1998;
“the initial period” is the first accounting period or, as the case may be, tax year in which there is a difference in the amount of the profits or losses falling to be shown in the return, according to whether the lease is a long funding lease or not;
“tax return” means—
(a)
a company tax return under paragraph 3 of Schedule 18 to F9FA 1998, or
(b)
a return under section 8 of the Taxes Management Act 1970 (income tax: personal return).