Commentary

B5.409A Anti-avoidance—disapplication of long funding lease deduction

Business tax
Business tax | Commentary

B5.409A Anti-avoidance—disapplication of long funding lease deduction

Business tax | Commentary

B5.409A Anti-avoidance—disapplication of long funding lease deduction

In response to specific schemes disclosed to HMRC, there is legislation that disapplies the long funding lease rules1 in the following situations:

  1.  

    (a)     if any part of the expenditure incurred by the lessor on the acquisition of the plant or machinery leased under the relevant lease is allowable as a deduction in computing the lessor's profits for tax purposes as a result of the plant or machinery forming part of its trading stock2. This provision ensures that the restriction on the rental earnings on which the lessor is taxable (B5.406) does not apply

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