68 Taking over payment obligations as lessee of plant or machinery
Finance Act 2016 (2016 c 24) | Legislation

68  Taking over payment obligations as lessee of plant or machinery

(1)     In Part 20 of CTA 2010 (tax avoidance involving leasing plant or machinery), after section 894 insert—

“Chapter 3
Consideration for Taking Over Payment Obligations as Lessee Treated as Income

894A Consideration for taking over payment obligations as lessee treated as income

(1)     This section applies where under any arrangements—

(a)     a company chargeable to corporation tax (C) agrees to take over obligations of another person (D) as lessee under a lease of plant or machinery,

(b)     as a result of that agreement C, or a person connected with C, becomes entitled to income deductions (whether deductions in calculating income or from total profits), and

(c)     a payment is payable to C, or a person connected with C, by way of consideration for that agreement.

(2)     The payment is treated for the purposes of corporation tax as income received by C in the period of account in which C takes over the obligations mentioned in subsection (1)(a).

(3)     Subsection (2) does not apply if and to the extent that the payment is (apart from this section)—

(a)     charged to tax on C, or a person connected with

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