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HMRC internal manual

Oil Taxation Manual

From
HM Revenue & Customs
Updated
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Corporation Tax Ring Fence: Sale and Leaseback of assets

CTA10\S288

CTA10\S288 provides that where a sale and leaseback transaction has occurred, the finance charge element of lease rentals will not be allowable as a deduction in the CT ring fence unless the proceeds from the sale of the asset are applied to finance North Sea activities.

Expenditure disallowed is treated as a non-trading debit in respect of a loan relationship of the lessee for that accounting period and is therefore deductible for non-ring fence CT purposes.