Anti-Avoidance: New measures announced in relation to leasing.
HMRC have recently published new anti-avoidance measures aimed at blocking avoidance involving leases. These measures came into effect on 13 November 2008.
Listed below is a summary of the main measures which have been introduced:
1) Plant & Machinery Leasing
This measure has been introduced to ensure that a business does not gain any additional relief by virtue of entering into a leaseback arrangement following the sale or lease of plant or machinery.
HMRC have sought to ensure that no tax is avoided when a lessor grants a long funding lease and when a long funding lease ends that the lessee has obtained an appropriate amount of relief.
2) Sale of lessor companies
Draft legislation has been written to ensure that an intermediate lessor will be treated in the same way as a head lessor.
3) Leasing avoidance by film partnerships
This final measure has been written to ensure that partnerships which invest in films cannot avoid tax by converting existing leases to long funding leases.