Section 888 | Restrictions on leasing partnership losses

(1)The restrictions in subsections (2) to (4) apply in respect of so much of the loss incurred by the company in its notional business as derives from any relevant capital allowances (“the restricted part of the loss”).

(2)Relief is not to be given to the company under any relevant loss relief provision in respect of the restricted part of the loss, except by way of set off against any relevant leasing income.

(3)If the leasing business is a trade, relief is not to be given to the company under section 37 or 45A (relief for trade losses against total profits) in respect of the restricted part of the loss.

(4)The restricted part of the loss is not available for set off —

(a)by way of group relief in accordance with Chapter 2 of Part 5 (surrender of company's losses etc for an accounting period), or

(b)by way of group relief for carried-forward losses in accordance with Chapter 2 of Part 5A (surrender of company's carried-forward losses etc.)

(5)For the purpose of determining how much of a loss derives from any relevant capital allowances, the loss is to be calculated on the basis that any relevant capital allowances are the final amounts to be deducted.

(6)In this section—

“the leasing business” has the same meaning as in section 887,

“relevant leasing income” means any income of the company's notional business deriving from any lease which—

(a)is a lease of plant or machinery, and

(b)was entered into before the end of the accounting period of the company in which the loss in the notional business was incurred, and

“relevant loss relief provision” means—

(a)section 45 (carry forward of pre-1 April 2017 trade loss against subsequent trade profits),

(ab)section 45B (carry forward of post-1 April 2017 trade loss against subsequent trade profits),

(b)section 62 (relief for losses made in UK property business),

(c)section 63 (company with investment business ceasing to carry on UK property business),

(d)section 66 (relief for losses made in overseas property business), and

(e)section 91 (relief for losses from miscellaneous transactions).