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HMRC internal manual

Business Leasing Manual

Sale of lessor companies and similar arrangements: partnerships: quantifying the basic income amount

Section 421 CTA2010

The income amount is calculated in two stages, in the same way as for a leasing business carried on by a company on its own account (BLM80510).

The first stage is to identify the ‘basic amount’ by establishing the difference between:

  • the accounts value of the plant or machinery (PM), see BLM81075, and
  • the tax written down value of the plant or machinery (TWDV), see BLM81080.

on the relevant day.

The formula PM - TWDV gives the ‘basic amount’ of the income. The amount is nil when PM is less than TWDV.

The second stage is to adjust the basic amount so that if a partner reduces its interest in the leasing business from (say) 50% to 10% the charge is 40% of the basic amount Guidance on this is at BLM81085.