Income Tax Act 2007 section 614BY

Post-25 November 1996 schemes to which Chapter 3 applied first

Section 614BY ensures continuity of treatment when a finance lease that was originally subject to the Chapter 3 rules subsequently falls within the Chapter 2 rules, so that previously accumulated rental excess figures carry forward seamlessly.

• Where a lease initially governed by Chapter 3 later meets the Chapter 2 conditions in section 614BC, this section provides transitional continuity
• Any cumulative accountancy rental excess or cumulative normal rental excess built up under Chapter 3 is carried forward and treated as if Chapter 2 had applied all along
• This prevents a lessor from losing or resetting accumulated excess figures simply because the lease changed regulatory chapter
• Where the lessor at any relevant earlier time was within the charge to corporation tax rather than income tax, equivalent references to the Corporation Tax Act 2010 (section 902 and Chapter 3 of Part 21) are read in as appropriate