Capital Allowances Act 2001 section 259

Special leasing: corporation tax (general)

Section 259 sets out how capital allowances and balancing charges are given effect for corporation tax purposes when a company's qualifying activity is special leasing of plant or machinery.

• Allowances are deducted from the company's income from any of its special leasing activities in the current accounting period.
• Where the lessee did not use the leased asset for a qualifying activity for all or part of the period, the allowance (or a proportionate part) can only be set against income from that particular special lease.
• Any balancing charge is treated as income from special leasing of plant or machinery.
• Excess allowances are dealt with separately under section 260, which gives companies additional options not available for income tax purposes.