[F191A(1)This paragraph applies if the lease would fall to be regarded as a long funding lease for the purposes of Part 2 of the Capital Allowances Act 2001, apart from this paragraph.U.K.
(2)The lease is to be treated for tax purposes as not being a long funding lease at any time when the lease—
(a)meets the conditions in sub-paragraph (3), or
(b)is expected to meet those conditions when the ship is first brought into use under the lease,
but this is subject to the qualification in sub-paragraph (4) and the exception in sub-paragraph (5).
(3)The conditions are—
(a)that the lease falls within paragraph 91B (lease to tonnage tax company or group),
(b)that the lease falls within paragraph 91C (tonnage tax company to operate and manage qualifying ship),
(c)that the lease falls within paragraph 91D (period and rate of sublease of qualifying ship).
(4)The condition in paragraph (c) of sub-paragraph (3) has to be met, or be expected to be met, only at times when the company within tonnage tax is leasing the ship to a company not within tonnage tax.
(5)The conditions in paragraphs (b) and (c) of sub-paragraph (3) do not have to be met, or be expected to be met, if the lease was finalised (within the meaning of Part 4 of Schedule 8 to the Finance Act 2006) before 1st April 2006.
(6)Sub-paragraph (2) is subject to paragraph 91E (anti-avoidance).]
Textual Amendments
F1Sch. 22 paras. 91A-91F and cross-heading inserted (with effect in accordance with Sch. 8 para. 15 and Sch. 9 para. 10(5) to the amending Act) by Finance Act 2006 (c. 25), Sch. 9 para. 10(3)