Corporation Tax Act 2010 section 876

Adjustments where sum obtained before payment made

Section 876 deals with the adjustments that must be made when a capital sum is obtained from a leased asset before a related lease payment is subsequently made.

• Where a capital sum has been obtained (as described in section 873) and a lease payment is made later (as described in section 872), adjustments must be carried out to ensure the corporation tax charge on income in respect of that capital sum is properly applied.
• These adjustments are required to give effect to the tax charge imposed by section 874 on the capital sum.
• Any such adjustment may be made within a window of 6 years, starting from the end of the accounting period in which the later payment is made.
• This 6-year adjustment window overrides any other time limits that may exist elsewhere in the Corporation Tax Acts.