BLM80125 - Sale of lessor companies and similar arrangements: business of leasing plant or machinery: adjustments to the balance sheet figures: plant or machinery assets acquired during the relevant day - transactions before 13 November 2008

FA06/Sch10/Para7 (3) (b)

This guidance covers transactions where the relevant day is before 13 November 2008. For transactions on or after 13 November 2008 see BLM80127

The balance sheet figure is adjusted to include any transfers of plant or machinery from associated companies on the relevant day. These amounts would not be reflected in the balance sheet of the lessor company at the start of the day and could have a significant effect on the operation of the test, see BLM80130.

Associated companies are defined in FA06/SCH10/PARA9 as companies where one has control of the other or both are under the control of the same person. Control takes its meaning from section 416 ICTA 1988.

This is extended to cover members of a consortium when

  • the lessor company is a company owned by a consortium or a 90% subsidiary of a company owned by a consortium
  • there is a change of ownership of the lessor company that involves a member of the consortium.

In this situation the meaning of associated company extends to cover any member of the consortium and any company associated with a member of a consortium when the change is in relation to that member, see example at BLM80135.