Part 9Leasing plant or machinery

Chapter 4Sales of lessors: leasing business carried on by a company in partnership

“Business of leasing plant or machinery”

410“Business of leasing plant or machinery”

(1)

A business carried on by the partnership is a business of leasing plant or machinery on the relevant day if condition A or B is met.

(2)

Condition A is that at least half of the relevant plant or machinery value relates to F1 plant or machinery falling within subsection (6).

(3)

Subsection (2) is supplemented by section 411.

F2(4)

Condition B is that at least half of the partnership's income in the past 12 months derives from plant or machinery falling within subsection (6).

(5)

Subsection (4) is supplemented by section 414.

F3(6)

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 partnership 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 partnership.

(7)

For the purposes of subsection (6)—

(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 who is a partner in the partnership or connected with a partner in the partnership (see also subsection (8)), 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).

(8)

In relation to a corporate partner who is owned by a consortium or is a qualifying 75% subsidiary of a company owned by a consortium, the reference in subsection (7)(b) to a person connected with a partner also includes—

(a)

any member of the consortium, and

(b)

any person connected with such a member.

(9)

A reference in this section to the past 12 months is to the period of 12 months ending with the relevant day.