(1)This section determines for the purposes of this Chapter whether, on any day (“the relevant day”), a company (“the relevant company”) carries on a business of leasing plant or machinery.
(2)A business carried on by the relevant company is a business of leasing plant or machinery on the relevant day if condition A or B is met.
(3)Condition A is that at least half of the relevant plant or machinery value relates to [F1plant or machinery falling within subsection (7)].
(4)Subsection (3) is supplemented by section 388.
[F2(5)Condition B is that at least half of the relevant company's income in the past 12 months derives from plant or machinery falling within subsection (7).]
(6)Subsection (5) is supplemented by section 391.
[F3(7)Plant or machinery falls within this subsection if—
(a)it is or at any time in the past 12 months has been leased out by the relevant company or a qualifying associate,
(b)the lease under which it is or has been leased out is a plant or machinery lease but not an excluded lease of background plant or machinery for a building (see section 437(3)), and
(c)if the plant or machinery satisfies paragraph (a) only because it is or has been leased out by a qualifying associate, the lessee under the lease is or was someone other than the relevant company.
(8)For the purposes of subsection (7)—
(a)plant or machinery is “leased out” by a person if it is subject to a plant or machinery lease under which that person is a lessor,
(b) “ associate ” means a person connected with the relevant company (see also subsection (9)), and
(c)a person is a “qualifying associate” if the person is an associate at the start of the relevant day or at any earlier time in the past 12 months (whether or not a time when the plant or machinery was leased out by the person).
(9)If the relevant company is owned by a consortium or is a qualifying 75% subsidiary of a company owned by a consortium, the reference in subsection (8)(b) to a person connected with the relevant company also includes—
(a)any member of the consortium, and
(b)any person connected with such a member.
(10)A reference in this section to the past 12 months is to the period of 12 months ending with the relevant day.]
Textual Amendments
F1 Words in s. 387(3) substituted (with effect in accordance with Sch. 6 para. 27 of the amending Act) by Finance Act 2011 (c. 11) , Sch. 6 para. 2(2)
F2 S. 387(5) substituted (with effect in accordance with Sch. 6 para. 27 of the amending Act) by Finance Act 2011 (c. 11) , Sch. 6 para. 2(3)
F3 S. 387(7)-(10) substituted for s. 387(7)(8) (with effect in accordance with Sch. 6 para. 27 of the amending Act) by Finance Act 2011 (c. 11) , Sch. 6 para. 2(4)