»Ê¹ÚÌåÓýapp

»Ê¹ÚÌåÓýapp sale of lessor company legislation triggers an income amount and expense amount whenever a lessor company changes hands. (See BLM81000 onwards where the leasing business is carried on by a company in partnership.)

»Ê¹ÚÌåÓýapp concept of ‘changing handsâ€� goes much wider than simply selling the company. »Ê¹ÚÌåÓýapp legislation refers to a ‘qualifying change of ownershipâ€�. In broad terms it covers a change in the ownership of a company which might result in a change in the flow of group relief to or from the lessor company. Detailed guidance on what is meant by a qualifying change of ownership is at BLM80315.

It does this by

• identifying a business of leasing plant or machinery, see BLM80100Ìý
• identifying when a lessor company changes hands, which the legislation refers to as a ‘qualifying change of ownershipâ€� (this is much wider than a simple sale, see BLM80300)
• calculating an amount of income and bringing this into the computation of profits in the lessor company, see BLM80500Ìý
• bringing the accounting period of the lessor company to a close
• calculating an expense to be deducted in the new accounting period of the lessor company.

»Ê¹ÚÌåÓýapp income amount is designed to recover the tax benefits derived from capital allowances by the selling group and the expense amount returns that benefit to the buying group. »Ê¹ÚÌåÓýapp expense amount is available to the buying group and is of little use to a loss-making group, but can be used by a profitable group and so sales to loss-makers , where tax might be at risk are deterred. »Ê¹ÚÌåÓýapp same principles apply to the similar avoidance using partnerships.

»Ê¹ÚÌåÓýapp legislation applies only to companies within the charge to corporation tax carrying on a business alone or in partnership.