What does section 614BR of the Income Tax Act 2007 do?

Section 614BR is an introductory provision that sets the scene for sections 614BS to 614BW. It confirms that those capital allowance rules are triggered whenever a major lump sum becomes payable in connection with a finance lease of an asset under United Kingdom tax law.

What is 'the relevant occasion' under section 614BR?

The relevant occasion is the defined moment at which a major lump sum falls to be paid in relation to a finance lease. Section 614BR establishes this terminology so that sections 614BS to 614BW can consistently refer back to the same triggering event without repeating the full description.

What is a 'major lump sum' for the purposes of section 614BR?

A major lump sum is a defined term found in section 614BC(5) of the Income Tax Act 2007. It broadly refers to a substantial single payment arising under a finance lease arrangement, such as a large balloon payment due at the start, during, or at the end of the lease term.

When must capital allowance implications under sections 614BS to 614BW be considered?

Capital allowance implications must be considered whenever a party to a finance lease faces a large lump sum payment. For example, if a business has a £500,000 balloon payment due at the end of a machinery lease, sections 614BS to 614BW govern how capital allowances interact with taxation of that payment.

Income Tax Act 2007 section 614BR

Effect of capital allowances: introduction

Section 614BR introduces a group of provisions (sections 614BS to 614BW) that deal with the impact of capital allowances when a major lump sum becomes payable in connection with a finance lease of an asset.

This section and sections 614BS to 614BW apply when a major lump sum falls to be paid in relation to the lease of an asset
The point at which the major lump sum falls to be paid is defined as "the relevant occasion" for the purposes of these sections
A "major lump sum" is a term defined elsewhere (in section 614BC(5)) and refers to a significant one-off payment connected with the lease
The sections that follow (614BS to 614BW) set out detailed rules on how capital allowances interact with the taxation of finance leases where such a lump sum arises

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