Losses derived from the expense amount can only be set
against ‘relevant leasing income’. This is income
derived from the leases that were in place before the day on which
the company is treated as incurring the expense. By restricting the
use of losses in this way the relief is streamed so that it can
only reduce profits on the leases that generated the income and
expense amounts on sale of the company. The acquiring group is thus
prevented from transferring tax profitable leases into the newly
acquired company in order to utilize losses derived from the
expense amount and from surrendering losses as group relief.
