Section 809ZA — Income Tax Act 2007: Plant and machinery leases: capital receipts to be treated as income

Plant and machinery leases: capital receipts to be treated as income 809ZA 1 This section applies if—

a there is an unconditional obligation, under a lease of plant or machinery or a relevant arrangement, to make a relevant capital payment (at any time), or b a relevant capital payment is made under such a lease or arrangement otherwise than in pursuance of such an obligation.

2 The lessor is treated for income tax purposes as receiving income attributable to the lease of an amount equal to the amount of the capital payment.

3 If subsection (1)(a) applies, the income is treated as income for the period of account in which there is first an obligation of the kind mentioned there.

4 If subsection (1)(b) applies, the income is treated as income for the period of account in which the capital payment is made.

5 For the meaning of “capital payment” and “relevant capital payment”, see section 809ZE.

6 For the meaning of other expressions used in this section or section 809ZC, 809ZD or 809ZE, see section 809ZF.