Part 20

Tax avoidance involving leasing plant or machinery
Chapter 2

Capital payments in respect of leases treated as income

Deduction where failure to make relevant capital payment expected
892
1
This section applies for corporation tax purposes if—
a
section 890 applies as a result of subsection (1)(a) of that section, and
b
at any time the lessor reasonably expects that the relevant capital payment will not be paid or will not be paid in full.
2
For the purposes of calculating the profits of the lessor, a deduction is allowed for the period of account which includes that time.
3
The amount of the deduction is equal to the amount reasonably expected not to be paid.
4
No other deduction is allowed in respect of the matters mentioned in subsection (1)(b).