Part II General Provisions relating to computation of gains and acquisitions and disposals of assets

Chapter II Assets and disposals of assets

General provisions

25AF1Long funding leases of plant or machinery: deemed disposals

1

This section applies where plant or machinery is used for the purpose of leasing under a long funding lease.

2

The lessor shall be deemed for all purposes of this Act—

a

to have disposed of the plant or machinery at the commencement of the term of the lease at F2the relevant disposal value, and

b

to have immediately reacquired it at the same value.

3

The lessor shall also be deemed for all purposes of this Act—

a

to have disposed of the plant or machinery on the termination of the lease for a consideration equal to the termination amount, and

b

to have immediately reacquired it for the same consideration.

F34

“Relevant disposal value” means—

a

in relation to a long funding finance lease, the disposal value described in item 5A of the table in section 61(2) of the Capital Allowances Act (disposal values), and

b

in relation to a long funding operating lease, the disposal value described in item 5B of that table.

5

For the purposes of this section, the following expressions have the meaning given in Chapter 6A of Part 2 of the Capital Allowances Act (interpretation of provisions about long funding leases)—

  • “commencement”, in relation to the term of a lease,

  • “lessor”,

  • “long funding lease”,

  • “long funding finance lease”,

  • “long funding operating lease”,

  • F4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  • “the term”, in relation to a lease,

  • “termination”,

  • “termination amount”.