Corporation Tax Act 2010 section 392

Relevant change in relationship

Section 392 defines what constitutes a "relevant change in relationship" between a leasing company and its principal company for the purposes of the sales of lessors rules.

• A relevant change in relationship occurs between a company ("A") that carries on a plant or machinery leasing business and its principal company, and is assessed against criteria set out in sections 393, 394 and 394ZA.
• The change may arise where A is a qualifying 75% subsidiary of a parent (section 393), where A is owned through a consortium arrangement (section 394), or where A joins a tonnage tax group (section 394ZA).
• A relevant change in relationship amounts to a "qualifying change of ownership", which triggers deemed income and a matching expense for A — whether A carries on the leasing business alone (under section 383) or in partnership (under section 425).
• The provision applies across both Chapter 3 (business carried on by a company alone) and Chapter 4 (business carried on in partnership), ensuring consistent treatment regardless of how the leasing activity is structured.