Corporation Tax Act 2009 section 855

Further provision about regulations under section 854

Section 855 sets out the detailed scope of regulations that may be made under section 854 concerning the tax treatment of intangible fixed assets that are subject to finance leases and accounted for by the finance lessor as financial assets.

• Regulations may reclassify a finance-leased asset from a financial asset to an intangible fixed asset for the purposes of the intangible fixed assets regime, treating its balance sheet value as capitalised expenditure — but without allowing fixed-rate writing down elections or roll-over relief on reinvestment
• Where a lessor previously recognised an asset as an intangible fixed asset and it then becomes subject to a finance lease (changing its accounting treatment to a financial asset), the value of the newly created financial asset may be treated as realisation proceeds of the original intangible fixed asset
• Assets that are only partially excluded from the intangible fixed assets regime (such as certain rights where only royalty income falls within the regime) may be entirely excluded for the finance lessor if they are subject to a finance lease and accounted for as financial assets; assets used by the finance lessee for a trade subject to income tax may also be excluded
• An intangible asset may be treated as a pre-Finance Act 2002 asset in the hands of the finance lessor if the finance lessee is a company for which the asset was a pre-Finance Act 2002 asset, or a related party of such a company; the regulations may also make incidental, supplemental, consequential, transitional provisions and savings, including modifications to other Corporation Tax Acts provisions