Capital Allowances Act 2001 section 228MC

Rental rebate

Section 228MC defines what a "rental rebate" means for the purposes of restricting qualifying expenditure on leased plant and machinery, and explains the various ways in which the termination value of an asset may be calculated.

• A rental rebate is any sum payable to the lessee that is worked out by reference to the termination value of the leased asset
• The termination value is generally the value of the asset at or around the time the lease comes to an end
• Termination value can be based on sale proceeds, insurance or compensation receipts, or an estimate of market value
• The definition also catches indirect methods of calculation that would be expected to produce a broadly similar result to a direct termination value calculation