Defining long funding leases: election: withdrawing an election (SI2007/304 regulation 2(2))
An election may only be withdrawn by amending the return (or further amending a return) for the period in which the election is made.
In practice this means that the amended return must be based on the profits computed on the basis that an election had not been made.
Exceptionally, withdrawing an election will require amending the return for more than one year.
The time limit for withdrawing an election is the same as the time limit for making an election. That is, if an election is to be withdrawn it must be withdrawn within the permitted time BLM24040.
A company submits its return for the years to 31 December 2006 on 30 June 2007 and its return for the year to 31 December 2007 on 30 June 2008. The return for 2006 contains an election with an effective date of 1 April 2006. The profits for both years are computed accordingly.
On 30 September 2007 the company submits an amended return for the year to 31 December 2006. The amended return is made on the basis that the election has been withdrawn. The company’s 2007 return is now incorrect and so the company also submits an amended return for that year.