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HMRC internal manual

Business Leasing Manual

From
HM Revenue & Customs
Updated
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Sale of lessor companies and similar arrangements: anti-avoidance: manipulation of balance sheet values - introduction

Sections 435 and 436 CTA2010

Balance sheet values might be manipulated with the purpose of avoiding the charge under the sale of lessor company provisions. If the amounts shown in the balance sheet in respect of plant or machinery are depressed the PM amount is decreased, perhaps to nil. Where this is the case, two consequences could flow:

  • The company might no longer be regarded as carrying on the business of leasing plant or machinery, see BLM80100 onwards.
  • Even if it is still regarded as carrying on the business of leasing plant or machinery the sale of lessor company charge might be reduced or eliminated.

This avoidance activity is countered by sections 435 and 436 CTA2010.