[F170UPlant or machinery leased with land: low percentage valueU.K.
(1)This section applies where—
(a)any plant or machinery (the “relevant plant or machinery”) is affixed to, or otherwise installed, in or on any land,
(b)the plant or machinery is not background plant or machinery for any building situated in or on the land,
(c)the plant or machinery is leased with the land under a mixed lease, and
(d)none of the relevant disqualifications applies.
(2)For the purposes of this section the “relevant disqualifications” are the disqualifications set out in section 70S, but for this purpose—
(a)take the reference in subsection (1) of that section to subsection (2)(d) of section 70R as a reference to this subsection (and, accordingly, construe the second reference to that section as a reference to this section), and
(b)take references in section 70S to background plant or machinery for a building as references to relevant plant or machinery.
(3)Where this section applies, the derived lease of the relevant plant or machinery is excluded by this section if the condition in subsection (4) is met at the commencement of the term of that lease.
(4)The condition is that AMV does not exceed both—
(a)10% of BMV; and
(b)5% of LMV.
(5)For that purpose—
AMV is the aggregate of—
(a)the market value of the relevant plant or machinery, and
(b)the market value of any other plant or machinery that falls within subsection (1) in the case of the leased land;
BMV is the aggregate market value of all the background plant or machinery leased with the land;
LMV is the market value of the land (including buildings and fixtures).
(6)For this purpose the market value of any land at any time is to be determined on the assumption of a sale by an absolute owner of the land free from all leases and other encumbrances.]
Textual Amendments
F1Pt. 2 Ch. 6A inserted (with effect in accordance with Sch. 8 para. 15 of the amending Act) by Finance Act 2006 (c. 25), Sch. 8 para. 7