Income Tax (Trading and Other Income) Act 2005 section 148DA

"Starting value": general

Section 148DA explains how to determine the "starting value" of plant or machinery for the purposes of calculating the periodic deduction available to a lessor under a long funding operating lease (the section 148D lease).

• If the lessor's only use of the plant or machinery has been leasing it under the section 148D lease as a qualifying activity, the starting value equals the cost the lessor incurred in providing the asset.
• If the asset was previously leased under another long funding operating lease, the starting value is its market value at the start of the section 148D lease; if previously under a long funding finance lease, the starting value is the value recorded in the lessor's financial records at that date.
• If the asset was previously used for any other qualifying activity (not a long funding lease), the starting value is the lower of cost and market value.
• This section does not apply where the plant or machinery was originally "unqualifying" and the conditions in section 148DB(2) are met instead.