Corporation Tax Act 2010 section 371

Adjustments where sections 360 to 369 subsequently disapplied by section 370

Section 371 deals with the adjustments required when the long funding lease rules for lessors (sections 360 to 369) have previously been applied to calculate a company's profits or losses, but section 370 subsequently disapplies those rules because the plant or machinery is held as trading stock.

• This section applies where a company has previously used the long funding lease rules (sections 360 to 369) to calculate its profits or losses, and the trading stock condition in section 370(2) is subsequently met
• When triggered, both the amounts previously calculated under sections 360 to 369 and any new amounts arising under section 370 must be subject to just and reasonable adjustments
• The purpose is to ensure that the transition from long funding lease treatment to trading stock treatment produces a fair overall tax result, avoiding double counting or gaps
• All necessary assessments and amendments to assessments must be made to give effect to these adjustments