SCHEDULES

SCHEDULE 12 Leasing arrangements: finance leases and loans

Part IV Supplementary provisions

Interpretation

30

(1)

In this Schedule, unless the context otherwise requires—

“accountancy rental earnings” has the meaning given by paragraph 21(1) above;

“accountancy rental excess” shall be construed—

(a)

for the purposes of Part I of this Schedule, in accordance with paragraph 6 above; and

(b)

for the purposes of Part II of this Schedule, in accordance with paragraph 6 above as it has effect by virtue of paragraph 17 above;

“accounting purposes” means the purposes of—

(a)

accounts of companies incorporated in any part of the United Kingdom, or

(b)

consolidated group accounts for groups all the members of which are companies incorporated in any part of the United Kingdom;

“asset” means any form of property or rights;

“asset representing the leased asset” shall be construed in accordance with paragraph 26 above;

“assignment”, in the application of this Schedule to Scotland, means assignation;

F1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

“cumulative accountancy rental excess” and “cumulative normal rental excess” shall be construed—

(a)

for the purposes of Part I of this Schedule, in accordance with paragraph 6 above; and

(b)

for the purposes of Part II of this Schedule, in accordance with paragraph 6 above as it has effect by virtue of paragraph 17 above;

“the current lessor”, in the case of a lease of an asset, means the person who is for the time being entitled to the lessor’s interest under the lease;

“existing scheme” shall be construed in accordance with paragraph 27(1)(a) above;

“finance lessor” means a person who for accounting purposes is treated in accordance with F2generally accepted accounting practice as the person with—

  1. (i)

    the grantor’s interest in relation to a finance lease; or

  2. (ii)

    the lender’s interest in relation to a loan;

F1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3“ITTOIA 2005” means the Income Tax (Trading and Other Income) Act 2005;

“lease”—

(a)

in relation to land, includes an underlease, sublease or any tenancy or licence, and any agreement for a lease, underlease, sublease or tenancy or licence and, in the case of land outside the United Kingdom, any interest corresponding to a lease as so defined; and

(b)

in relation to any form of property or right other than land, means any kind of agreement or arrangement under which payments are made for the use of, or otherwise in respect of, an asset;

and “rent” shall be construed accordingly;

“the leasing arrangements”, in the case of a lease of an asset, means—

(a)

the lease of the asset,

(b)

any arrangements relating to or connected with the lease of the asset, and

(c)

any other arrangements of which the lease of the asset forms part,

and includes a reference to any of the leasing arrangements;

“the lessee”, in the case of a lease of an asset, means (except in the expression “the lessee’s interest under the lease”) the person entitled to the lessee’s interest under the lease;

“the lessor”, in the case of a lease of an asset, means (except in the expression “the lessor’s interest under the lease”) the person entitled to the lessor’s interest under the lease;

“major lump sum” shall be construed in accordance with paragraph 3(2) above;

“new scheme” shall be construed in accordance with paragraph 27(1)(b) above;

“normal rent” shall be construed in accordance with paragraph 20 above;

“normal rental excess” shall be construed—

(a)

for the purposes of Part I of this Schedule, in accordance with paragraph 6 above; and

(b)

for the purposes of Part II of this Schedule, in accordance with paragraph 6 above as it has effect by virtue of paragraph 17 above;

“period of account” means a period for which accounts are made up and, except for the purposes of paragraphs 2 to 4 and 23 above, means such a period which begins on or after 26th November 1996;

“related chargeable period” shall be construed in accordance with sub-paragraph (2) below;

“sum” includes any money or money’s worth (and “pay” and cognate expressions shall be construed accordingly);

“the rental earnings”, in relation to the lease of the asset and any period, has the meaning given by paragraph 22 above.

(2)

For the purposes of this Schedule a chargeable period is related to a period of account (and a period of account is related to a chargeable period) if—

(a)

the chargeable period is an accounting period which consists of or includes the whole or any part of the period of account; or

(b)

the chargeable period is a year of assessment whose basis period for the purposes of F4Part 2 of ITTOIA 2005 consists of or includes the whole or any part of the period of account.