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Changes over time for: Section 70O


Timeline of Changes
This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.
Status:
Point in time view as at 06/04/2024.
Changes to legislation:
Capital Allowances Act 2001, Section 70O is up to date with all changes known to be in force on or before 07 March 2025. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.

Changes to Legislation
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[70OThe lease payments testU.K.
This section has no associated Explanatory Notes
(1)A lease meets the lease payments test if—
(a)the present value of the minimum lease payments (see section 70YE),
is equal to
(b)80% or more of the fair value of the leased plant or machinery.
(2)The present value of the minimum lease payments is to be calculated by using the interest rate implicit in the lease.
(3)In this section “fair value” means—
(a)the market value of the leased plant or machinery,
less
(b)any grants receivable towards the purchase or use of that plant or machinery.
(4)For the purposes of this section—
(a)the interest rate implicit in the lease is the interest rate that would apply in accordance with normal commercial criteria, including, in particular, generally accepted accounting practice (where applicable), but
[(b)if a rate cannot be determined in accordance with paragraph (a), the interest rate implicit in the lease is taken to be [the incremental borrowing rate].]
[(5)For this purpose, the incremental borrowing rate has the same meaning as it has for accounting purposes.
(6)The Treasury may by regulations amend this section for the purpose of replacing references to the incremental borrowing rate with references to another rate.]]
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