Corporation Tax Act 2010 section 361

Lessor under long funding finance lease: exceptional items

Section 361 ensures that exceptional profits or losses arising to a lessor company in connection with a long funding finance lease are brought into account for corporation tax purposes, even where they would not otherwise be taxable or deductible.

• The section applies where a company is or has been the lessor under a long funding finance lease and an exceptional profit or loss arises in connection with that lease.
• A profit or loss is "exceptional" if it is recognised under generally accepted accounting practice but would not otherwise be included in the company's corporation tax computation.
• An exceptional profit is treated as taxable income attributable to the lease, and an exceptional loss is treated as an allowable revenue expense connected with the lease, regardless of whether the item is income or capital in nature.
• Recognition for accounting purposes covers amounts appearing in the profit and loss account, income statement, statement of comprehensive income, statement of changes in equity, or any other statement used to calculate the company's profits or losses for the period.