Introduction Overview Overview Section 417: Partner company’s income and other companies’ matching expense
1256.This section provides for the consequences of a “qualifying change” on any day in a company’s interest in a leasing business carried on by it in partnership. It is based on paragraph 23 of Schedule 10 to FA 2006.
1257.A “qualifying change” is defined in section 415 and occurs if there is a reduction in the company’s interest in the business.
1258.On the day of the qualifying change, the company is treated as receiving an amount of income and the other companies carrying on the business are treated as incurring an expense. In this case, there is no ending of an accounting period such as in section 383. The income and expense are recognised in the accounting period of the company which relates to the day of the qualifying change.
1259.If a single company is carrying on the business alone after the qualifying change, subsection (5) provides that the expense is treated as incurred by it at a time when it is carrying the business alone and is allowed as a deduction in calculating the profits of the business for the accounting period in which it is treated as incurred.