Leasing anti-avoidance
HMRC announces three measures effective from 13 November 2008
Leasing plant and machinery
HMRC will introduce anti-avoidance measures to ensure that a business entering into transactions involving leasebacks following the sale or lease of plant or machinery does not gain more relief than it would have done had it obtained loan finance.
The measures also ensure that:
- tax is not avoided when a lessor grants a long funding lease
- when a long funding lease ends, the lessee has obtained an appropriate amount of relief
HMRC has published a technical note which explains the background to the proposed measures as well as including a draft legislation that will be included in Finance Bill 2009.
Sale of lessor companies – intermediate lessors
Tax Avoidance disclosures have revealed that the Schedule 10 Finance Act 2006 provisions that were introduced to prevent a potential loss of tax when a lessor company is sold do not operate effectively when the lessor company is acting as an intermediate lessor.
HMRC has published a technical note which explains the background to these proposed measures and includes draft legislation to be included in Finance Bill 2009.
Leasing avoidance by film partnerships
Finally HMRC has also announced anti-avoidance measures that will prevent partnerships that have in the past invested in films from avoiding tax by converting an existing lease into a long funding lease.
The technical note that HMRC has published sets out the background and contains draft legislation to be included in Finance Bill 2009.
16 November 2008
