Income Tax Act 2007 section 614BW

Contributors to capital expenditure

Section 614BW extends the finance lease rules to persons who have contributed capital towards the cost of a leased asset and received capital allowances for that contribution.

• This section applies where a finance lease arrangement involving a leased asset falls within the scope of section 614BS or section 614BT
• A person (the "contributor") has received capital allowances under sections 537 to 542 of CAA 2001 in respect of a capital sum they contributed towards the cost of providing the leased asset
• The finance lease provisions of section 614BS or 614BT are extended so that they apply to the contributor and their allowances in the same way as they apply to the current lessor and the lessor's own capital expenditure allowances
• This ensures that contributors to capital expenditure on leased assets cannot use their capital allowances to circumvent the rules that restrict tax benefits on finance leases with a return in capital form