Taxation (International and Other Provisions) Act 2010 section 371SJ

Elections for leases to be treated as long funding leases

Section 371SJ allows UK parent companies to elect, on behalf of a controlled foreign company (CFC), for certain leases to be treated as long funding leases when calculating the CFC's assumed taxable profits.

• A notice can be given to HMRC requesting that a CFC be treated as having made a long funding lease election, provided the timing would have allowed the CFC itself to make such an election under normal corporation tax rules.
• The notice may only be given by one or more UK chargeable companies whose combined share of the CFC's chargeable profits for the relevant accounting period would represent more than half of the total percentage apportioned to all chargeable companies.
• The election can be withdrawn by giving a further notice to HMRC, again provided the timing would have permitted the CFC to withdraw such an election under normal rules.
• The Treasury has a reserved power to amend this section by regulations to reflect any future changes to the long funding lease election rules under Schedule 8 to Finance Act 2006.