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HMRC internal manual

Business Leasing Manual

sale of lessor companies and similar arrangements: calculating the income amount: adjustments to the basic amount: consortia

S406 CTA2010

There is an adjustment to the basic amount where:

  • The lessor company stops being a 75% subsidiary of another company, B Ltd, and instead becomes

    • a consortium company where B Ltd is a member of the consortium or
    • a subsidiary of a company owned by a consortium where company B is a member of the consortium, see examples at BLM80545 and BLM80550)

OR

  • there is a qualifying change of ownership of a consortium company, see BLM80555).

The adjustment reflects the fact that the relationship between the companies has changed but the lessor company continues to be able to surrender to and claim losses from the lessor company. The adjustment limits the income amount to reflect the reduction in the ‘ownership proportion’ of the basic amount.