Introduction Overview Overview Section 893: Meaning in Chapter of “Capital payment”, “relevant capital payment” etc
2643.This section defines “relevant capital payment” and related terms. It is based on section 785C(2) and (6) to (10) of ICTA.
2644.Subsection (2) defines the term “capital payment”. It excludes any payment that would fall to be included in calculating the lessor’s income for corporation tax purposes or any payment in respect of a long funding finance lease which would be so included but for the fact thatsection 360 ensures that only sums treated asthe gross return on investment or as interest in respect ofthe lease are taxed. Subsection (2), therefore, ensures that no part of the rentals under a long funding finance lease triggers section 890.
2645.Section 890 is only triggered if the capital payment is “relevant” as defined in subsections (3) to (5). But a capital payment which falls within those subsections is not relevant to the extent that it falls within subsection (6) and is only relevant to a limited extent if it falls within subsection (7).
2646.Payment is given an extended meaning for the purposes of the Chapter (see subsections (8) and (9)).