Section 261A Special leasing: leasing partnerships
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Amendments
Section 261A inserted by Finance Act 2006 section 83(3) in relation to any business carried on by a company in partnership in any accounting period of the partnership ending on or after 5 December 2005.
But, in relation to any accounting period of the partnership beginning before 5 December 2005 and ending on or after that date, the section only has effect if—
(a) the company starts to carry on the business in partnership on or after that date, or
(b) a relevant change in the interest of the company in the business occurs on or after that date.
(1) This section applies for corporation tax purposes if—
(a) a company carries on a business in partnership with other persons in a chargeable period of the partnership,
(b) the business (“the leasing business”) is, on any day in that period, a business of leasing plant or machinery,
(c) the company is entitled to an allowance under section 19 (special leasing of plant or machinery) for any chargeable period comprised (wholly or partly) in the chargeable period of the partnership, and
(d) the interest of the company in the leasing business during the chargeable period of the partnership is not determined on an allowable basis.
(2) Subsections (3) to (6) of section 260 do not apply in relation to the allowance.
(3) For the purposes of this section—
(a) “business of leasing plant or machinery” has the same meaning as in Part 3 of Schedule 10 to FA 2006 (sale etc of lessor companies etc), and
(b) section 785ZA of ICTA applies for determining whether the interest of the company in the leasing business during the chargeable period of the partnership is determined on an allowable basis.
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