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HMRC internal manual

Business Leasing Manual

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HM Revenue & Customs
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Sale of lessor companies and similar arrangements: change of ownership: introduction

Section 398A CTA2010

The election out of the charge was introduced with effect from 5 December 2009 and withdrawn with effect from 23 March 2011. It. Is therefore available where the relevant day falls on or after 5 December 2009 and before 23 March 2011.

The election allows a lessor company to opt out of the effect of the sale of lessor company provisions so that no charge is imposed and no relief is available. Instead, the company is subject to a number of restrictions which are designed to ensure that the transfer of a deferred tax liability to a loss making group cannot result in a loss of tax to the exchequer. The election is not available where the business is carried on by a company in partnership.

The restrictions are comprehensive and so the instances where an election will be beneficial are likely to be limited.