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HMRC internal manual

Business Leasing Manual

From
HM Revenue & Customs
Updated
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Sale of lessor companies and similar arrangements: business of leasing plant or machinery: identifying transactions that are affected

In most cases it will be immediately apparent that a company is a lessor company and that it has changed hands. Typically the company owns only assets that are leased out to others and it is a 100% subsidiary sold outright. However, the legislation is designed to deal with more complex structures such as partnerships and consortia and prevents groups from arranging their affairs to exploit alternative methods of ensuring that losses of the leasing business are tax effective while profits fall out of tax.

To decide whether a transaction is caught by the sale of lessor company legislation you need to answer two questions:

  • Is the company carrying on a business of leasing plant or machinery? See BLM80110 onwards.
  • Has there been a qualifying change in ownership? See BLM80300 onwards.
  • If the answer to both questions is ‘yes’ then
  • you need to calculate an amount of income and expense, see BLM80500 onwards.