Taxation of leased plant and machinery
New rules for identifying and taxing long funding leases of plant and machinery are introduced by Schedules 8 and 9 of the Finance Act 2006.
Initial guidance was included in a a Technical Note dated 1 August 2006 (PDF 373K) but it was always recognised that further guidance would be required.
This further guidance is included in a new Business Leasing Manual. The new manual includes
- guidance on the long funding lease regime
- guidance on sale of lessor companies and similar transactions
- guidance on lease accounting
- updated material from the existing Finance Leasing Manual
The Finance Leasing Manual will be withdrawn in the autumn.
The draft of the Business Leasing Manual is in three volumes for convenience:
- Volume 1: Accounting and general lease taxation (PDF 1.9MB)
- Volume 2: Anti-avoidance: Schedule 12 Finance Act 1997 (PDF 809K)
- Volume 3: Anti-avoidance: Sale of lessor companies and similar transactions (PDF 1.5MB)
When the manual is published in HTML format in the autumn it will be in a single volume.
Further guidance on the chargeable gains and tonnage tax aspects of the long funding lease rules will be included in the relevant manuals as soon as practicable.
We will welcome, at any time, suggestions on ways in which the Business Leasing Manual could be improved, whether by addition, removal or clarification of the content. Suggestions should be sent to Paul Lane.
