Corporation Tax Act 2010 section 389

Provision supplementing section 388

Section 389 provides supplementary rules for how the value of plant or machinery shown on a company's balance sheet is determined for the purposes of the section 388 calculation.

• The relevant balance sheet amounts are the net book value (carrying amount) of plant or machinery and the net investment in any finance leases of that plant or machinery.
• Where plant or machinery is a fixture in land, or where a finance lease covers both plant or machinery and other assets, the amount attributable to the plant or machinery must be determined on a just and reasonable basis.
• Balance sheet amounts are determined on the assumption that the balance sheet is prepared in accordance with generally accepted accounting practice.
• Where plant or machinery was acquired from a connected person on or after 5 December 2005 (with the relevant day falling on or after 22 March 2006), it is assumed to have been acquired at its ascribed value as at the relevant day, rather than at its actual cost.