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

Cases where ss 148A to 148F do not apply: plant or machinery held as trading stock

Section 148FA disapplies the special long funding lease rules for lessors (sections 148A to 148F) where plant or machinery is held as trading stock, and provides for adjustments where those rules were previously applied before the trading stock condition was met.

• The long funding lease rules in sections 148A to 148F do not apply to a trader who is or has been a lessor under a long funding lease, provided the acquisition cost of the leased plant or machinery is deductible in calculating trading profits because it forms part of trading stock.
• This exclusion also covers situations where the deduction entitlement arises at a later date, provided the plant or machinery forms part of trading stock at that later time.
• If sections 148A to 148F were previously applied to calculate trading profits, and the trading stock condition is met at a subsequent time, just and reasonable adjustments must be made to all affected amounts.
• HMRC must make all necessary assessments and adjustments to assessments to give effect to any such corrections.