Corporation Tax Act 2010 section 380

"Starting value" in section 379

Section 380 defines the "starting value" of plant or machinery for the purpose of the deduction calculation required by section 379 in relation to a long funding operating lease.

• In the general case, the starting value is the market value of the plant or machinery at the commencement of the lease term.
• A special rule applies where the lessee originally acquired the asset for non-qualifying purposes but brings it into use for a qualifying activity on or after 1 April 2006.
• Under the special rule, the starting value is the lower of the first use market value and the first use amortised market value at the time the asset is first used for the qualifying activity.
• First use amortised market value is calculated by assuming the market value at the start of the lease had been written off on a straight line basis over the asset's remaining useful economic life.