Corporation Tax Act 2010 section 370

Plant or machinery held as trading stock

Section 370 provides an exemption from the long funding lease rules for lessors where the plant or machinery they lease out forms part of their trading stock.

• The special long funding lease rules in sections 360 to 369 do not apply where the lessor holds the leased plant or machinery as trading stock.
• The exemption applies where any part of the cost of acquiring the plant or machinery is deductible for corporation tax purposes because it is trading stock.
• The exemption still applies even if the company only becomes entitled to the trading stock deduction at a later date after the expenditure was originally incurred.
• This means lessors who are effectively dealers in plant or machinery continue to account for their leasing transactions under normal trading rules rather than the special long funding lease provisions.