Capital Allowances Act 2001 section 261A

Special leasing: leasing partnerships

Section 261A restricts the way capital allowances for special leasing of plant or machinery are given effect when a company carries on a leasing business through a partnership and its interest in that business is not determined on an allowable basis.

• Applies for corporation tax where a company is in partnership and the partnership business involves leasing plant or machinery
• The company must be entitled to a special leasing allowance under section 19 for a chargeable period falling within the partnership's chargeable period
• The restriction is triggered when the company's interest in the leasing business during the partnership's chargeable period is not determined on an allowable basis
• Where the restriction applies, the normal rules in section 260(3) to (6) for giving effect to excess special leasing allowances against the company's total profits do not apply