BLM81080 - Sale of lessor companies and similar arrangements: partnerships: quantifying the TWDV figure amount
Section 421 CTA2010
This guidance covers transactions where the relevant day falls before 23 March 2011. See BLM81082 where the relevant day falls on or after 23 March 2011.
The figure is calculated in a way similar to the calculation for a company carrying on a business of leasing on its own account. See BLM80530.
Modifications are needed to the lessor company provisions because the accounting period of the lessor partnership is not brought to a close.
The TWDV figure is found by assuming that the partnership chargeable period (for the purposes of CAA 2001) ends on the relevant day - the day of the change - and a new chargeable period starts on the following day. This enables the TWDV of the various pools can be calculated.
In the same way as for lessor companies, the TWDV figure is adjusted to exclude any plant or machinery acquired by the partnership on the relevant day except for assets acquired from a ‘qualifying company’.
A ‘qualifying company’ is:
- the partner company that you are considering
- any company which is an associated company of that partner company
- any other partner company whose interest in the business falls
- any other partner company in relation to which there is a qualifying change of ownership on the day; and
- any company which is an associated company of any other partner company mentioned in 3 or 4.
These companies are the same companies as were identified for the purposes of determining the PM figure in order to decide whether a company is carrying on a business of leasing plant or machinery in partnership.