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HMRC internal manual

Business Leasing Manual

Sale of lessor companies and similar arrangements: partnerships: Condition A - identifying ‘relevant transferred plant or machinery’

Section 411 CTA2011

Relevant plant or machinery includes plant or machinery shown on the partnership balance sheet and ‘relevant transferred plant or machinery’. Relevant transferred plant or machinery is plant or machinery transferred into the partnership during the relevant day from certain specified companies:

  1. the partner company that you are considering;
  2. any company which is an associated company of that partner company;
  3. any other partner company whose interest in the business falls
  4. any other partner company in relation to which there is a qualifying change of ownership on the day; and
  5. any company which is an associated company of any other partner company mentioned in (c) or (d).

Broadly companies are ‘associated companies’ for these purposes if at the start of the day one of the two has control of the other or both are under the control of the same person or persons. Control takes its meaning from section 1124 CTA2010.

The rules identify assets transferred to the partnership from an associated company on the day of the change in partnership profit sharing arrangements. These amounts would not be reflected in the balance sheet of the partnership at the start of the day and could have a significant effect on the operation of the test.