Section 398A | Election out of qualifying change of ownership ^F1

(1)This section applies if—

(a)on any day before 23 March 2011 (“ the relevant day ”) a company (“A”) carries on a business of leasing plant or machinery otherwise than in partnership,^F2

(b)there is a relevant change in the relationship between A and a principal company of A (“P”) on the relevant day, and

(c)an election that this section is to apply is made by A.

(2)For the purposes of the sales of lessors Chapters, there is no qualifying change of ownership in relation to A on the relevant day as a result of the change in the relationship but—

(a)subsections (2)(b) and (4)(b) of section 383 nevertheless apply,

(b)section 398D (and section 398C so far as relating to it) has effect during the relevant period, and

(c)sections 398E to 398G (and section 398C so far as relating to section 398E) have effect on the relevant day and during the relevant period.

(3)“The relevant period” is the period—

(a)beginning with the day after the relevant day, and

(b)ending with the day on which there is next a relevant change in the relationship between A and a principal company of A falling within subsection (4) (or continuing indefinitely if there is not another such relevant change).

(4)A relevant change in the relationship between A and a principal company of A falls within this subsection if, as a result of it, the (unadjusted) basic amount (see section 399) is (or, but for a further election, would be) treated as a receipt of the business of leasing plant or machinery carried on by A.

(5)Where during the relevant period there is a relevant change in the relationship between A and a principal company of A but the relevant period is not brought to an end by it, for the purposes of the sales of lessors Chapters there is no qualifying change of ownership in relation to A as a result of the change in the relationship.