Corporation Tax Act 2010 section 891

Apportionments for leases of plant or machinery and other property

Section 891 deals with how capital payments must be split on a just and reasonable basis when a lease covers both plant or machinery and other property, ensuring that only the portion relating to non-fixture plant or machinery falls within the anti-avoidance rules of section 890.

• Where a lease covers plant or machinery together with other property, any capital payment received must be apportioned on a just and reasonable basis between the plant or machinery element and the other property element
• Plant or machinery whose income would be taxed as profits of a UK property business (such as furniture let as part of a property) is treated as "other property" for the purposes of the apportionment, and therefore falls outside the scope of section 890
• Only the portion of the capital payment apportioned to plant or machinery that is not treated as other property is brought into charge under section 890
• The reclassification of certain plant or machinery as other property applies whether or not any income from that plant or machinery has actually been received — it is sufficient that any such income would be chargeable as UK property business profits if it arose