Corporation Tax Act 2010 section 402

"PM" where relevant company lessee under long funding lease etc

Section 402 adjusts the calculation of the plant and machinery element ("PM") in the property value computation where the relevant company holds plant or machinery under a long funding lease or a hire purchase type arrangement.

• Where plant or machinery is held under a qualifying lease or hire purchase arrangement, any amount already included for that asset in the standard market value or disposal proceeds figures must be stripped out of the PM calculation
• Instead, the ascribed value of that plant or machinery as at the relevant day is added back into the PM figure, or becomes PM itself if the figure would otherwise be nil
• The section applies where, at the start of the relevant day, the company is the lessee under a long funding finance lease, a long funding operating lease, or is treated as owner under a hire purchase or similar contract — or where the asset is acquired from an associated company on the relevant day and one of those conditions is met by the end of that day
• The effect is to ensure that plant and machinery held under these financing arrangements is valued on a consistent basis using its ascribed value, rather than being picked up through market value or disposal figures that may not reflect the company's actual economic interest