Part 2

Trading income
Chapter 10A

Leases of plant or machinery: special rules for long funding leases

Lessors under long funding operating leases

Determination of remaining residual value resulting from lessor's further additional expenditure
148EB
1
This section sets out how the remaining residual value of the plant or machinery resulting from the additional expenditure (“
RRV
”) is determined for the purposes of section 148E(4) if section 148E has applied in relation to previous additional expenditure incurred by the person in relation to the leased plant or machinery.
2
RRV
depends on whether—
a
the amount which is expected to be the residual value of the plant or machinery at the time when the further additional expenditure is incurred (“FARV”), exceeds
b
the sum of the amounts in subsection (3).
3
Those amounts are—
a
the amount which at the commencement of the term of the lease is expected to be the residual value of the plant or machinery (or, if section 148DB applies, would have been expected to be that value had that value been estimated at that time), and
b
any amounts that were subtracted under section 148E(4) as the remaining residual value of the plant or machinery resulting from the previous additional expenditure.
4
If FARV exceeds the sum of the amounts in subsection (3),
RRV
is the portion of the excess that is a result of the further additional expenditure.
5
Otherwise,
RRV
is nil.
6
For the meaning of “residual value”, see section 148J(2).
Pt. 2 Ch. 10A, (ss 148A-148J) inserted (19.7.2006) by Finance Act 2006 (c. 25), s. 81, Sch. 8 para. 13
Pt. 2 Ch. 10A, (ss. 148A-148J) inserted (19.7.2006) by Finance Act 2006 (c. 25), s. 81, Sch. 8 para. 13
Ss. 148EA, 148EB inserted (1.4.2010) (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 450 (with Sch. 2)