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HMRC internal manual

Business Leasing Manual

Introduction: anti-avoidance rules: capital allowances

Chapter 17 of CAA2001 contains a number of anti-avoidance rules that deter exploitation of plant or machinery allowances. They cover

  • transactions between connected persons
  • transactions where the sole or main benefit is to obtain plant or machinery allowances
  • sale and leaseback
  • restriction of a lessor’s capital allowances where the assets are used for finance leasing
  • sale and finance leaseback
  • lease and finance leaseback
  • leases where there are arrangements in place the reduce the lessor’s risk from non-payment of rentals by the lessee (known as defeasance)
  • sale of assets without the income stream.

Guidance is at CA28000 and CA28900 onwards.