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HMRC internal manual

Business Leasing Manual

Sale of lessor companies and similar arrangements: anti-avoidance: meaning of ‘relevant leasing income’

Section 432 CTA2010

Where section 432 applies losses derived from the expense amount can only be set against ‘relevant leasing income’. This is income derived from the leases that were in place before the day on which the company is treated as incurring the expense. By restricting the use of losses in this way the relief is streamed so that it can only reduce profits on the leases that generated the income and expense amounts on sale of the company. The acquiring group is thus prevented from transferring tax profitable leases into the newly acquired company in order to utilize losses derived from the expense amount other than against the relevant leasing income and from surrendering losses as group relief.