BLM24085 | Defining long funding leases: election: eligible leases: background plant or machinery etc (SI2007/304 regulation 3 condition H)

The lease must not be a lease of background plant or machinery leased with land where the plant or machinery has a low value when compared with the value of the land leased withit.

Where a lessor leases plant or machinery but does not lease it with land then condition H will not prevent the lease being an eligible lease even if the plant or machinery is of the type that would be background plant or machinery if leased with land.

Background plant or machinery

Leases of background plant or machinery are defined by CAA01/S70R. In broad terms background plant or machinery includes such equipment as lifts and central heating when they are leased with a building. Such leases are excluded from the scope of the long funding lease rules BLM21305 onwards. Condition H ensures that such leases are not brought back within the scope of the long funding lease rules where a lessor has made an election.

Plant or machinery with a low value compared with land

Leases of plant or machinery that has a low value compared to the value of the land and buildings with which it is leased are excluded from the scope of the long funding lease rules BLM21600. Condition H ensures that such leases are not brought back within the scope of the long funding lease rules where a lessor has made an election.