Income Tax Act 2007 section 809ZC

Section 809ZA: lease of plant and machinery and other property

Section 809ZC deals with how capital payments are split when a lease covered by the anti-avoidance rules in section 809ZA includes both plant or machinery and other property.

• Where a lease covers both plant or machinery and other property, any capital payment received must be apportioned between the two categories on a just and reasonable basis
• If income from any item of plant or machinery is already taxable as property income under Part 3 of ITTOIA 2005, that item is treated as "other property" rather than as plant or machinery for the purposes of the apportionment
• The anti-avoidance charge under section 809ZA only applies to the portion of the capital payment attributed to the plant or machinery element, not to the portion attributed to other property
• The apportionment ensures that only the plant or machinery component of a mixed lease triggers the income treatment of capital receipts under section 809ZA