Corporation Tax Act 2010 section 436

Balance sheet amounts determined on assumption company has no liabilities

Section 436 is an anti-avoidance provision that requires the balance sheet value of plant or machinery to be determined as if the company had no liabilities, where those liabilities would otherwise reduce or eliminate the amount shown.

• Where a company's liabilities cause the balance sheet value of its plant or machinery to be reduced or eliminated, this section requires that value to be recalculated as though the company had no liabilities on the relevant day.
• The section is triggered when either no amount would appear on the balance sheet for the plant or machinery (Condition A), or the amount shown is less than it would be if the company were assumed to have no liabilities (Condition B).
• For the purposes of this section, "liabilities" includes any share capital issued by the company that is treated as a liability under accounting standards.
• The provision applies equally to partnerships, with references to "company" read accordingly, except that the extended definition of liabilities covering share capital does not apply to partnerships.