Finance Act 2011

Businesses carried on by companies in partnershipU.K.

10U.K.Chapter 4 of Part 9 of CTA 2010 (sale of lessors: leasing business carried on by a company in partnership) is amended as follows.

11(1)Section 410 (“business of leasing plant or machinery”) is amended as follows.U.K.

(2)In subsection (2), for “qualifying leased plant or machinery” substitute “ plant or machinery falling within subsection (6) ”.

(3)For subsection (4) substitute—

“(4)Condition B is that at least half of the partnership's income in the past 12 months derives from plant or machinery falling within subsection (6).”

(4)For subsections (6) and (7) substitute—

“(6)Plant or machinery falls within this subsection if—

(a)it is or at any time in the past 12 months has been leased out by the partnership or a qualifying associate,

(b)the lease under which it is or has been leased out is a plant or machinery lease but not an excluded lease of background plant or machinery for a building (see section 437(3)), and

(c)if the plant or machinery satisfies paragraph (a) only because it is or has been leased out by a qualifying associate, the lessee under the lease is or was someone other than the partnership.

(7)For the purposes of subsection (6)—

(a)plant or machinery is “leased out” by a person if it is subject to a plant or machinery lease under which that person is a lessor,

(b)“associate” means a person who is a partner in the partnership or connected with a partner in the partnership (see also subsection (8)), and

(c)a person is a “qualifying associate” if the person is an associate at the start of the relevant day or at any earlier time in the past 12 months (whether or not a time when the plant or machinery was leased out by the person).

(8)In relation to a corporate partner who is owned by a consortium or is a qualifying 75% subsidiary of a company owned by a consortium, the reference in subsection (7)(b) to a person connected with a partner also includes—

(a)any member of the consortium, and

(b)any person connected with such a member.

(9)A reference in this section to the past 12 months is to the period of 12 months ending with the relevant day.”

12U.K.In section 412 (provision supplementing section 411), in subsection (5)(b), for “market value” substitute “ ascribed value ”.

13U.K.In section 413 (relevant plant or machinery value where partnership lessee under long funding lease etc), in subsection (2), for “market value” substitute “ ascribed value ”.

14U.K.In section 414 (partnership's income for condition B in section 410), in subsection (5), for “qualifying leased plant or machinery” substitute “ plant or machinery falling within section 410(6) ”.

15(1)Section 421 (the amount of the income: the basic amount) is amended as follows.U.K.

(2)In subsection (6), for paragraph (b) substitute—

“(b)in calculating the amounts of unrelieved qualifying expenditure mentioned in subsection (5)(a) to (c), any part of those amounts that is relevant new expenditure is to be left out of account.”

(3)After that subsection insert—

“(6A)Relevant new expenditure” means—

(a)expenditure attributable to plant or machinery acquired by the partnership on the relevant day except for plant or machinery acquired on that day from a qualifying company, and

(b)expenditure incurred on the relevant day but attributable to plant or machinery acquired by the partnership before that day.

(6B)In subsection (6A)—

(a)“acquired” includes brought into use or made available for use for the first time for the purposes of the business, and

(b)a reference to anything acquired or incurred includes anything treated as acquired or treated as incurred.”