Section 70V | Tax avoidance involving international leasing ^F1

(1)This section applies where matters are so arranged that there are plant or machinery leases such that—^F1

(a)under a lease by a non-resident, an asset is provided directly or indirectly to a resident,^F1

(b)the direct provision of the asset to the resident is by a lease which, in the case of the resident, is a long funding lease or a lease to which section 67 (hire purchase etc) applies,^F1

(c)the asset is used by the resident for the purpose of leasing it under a lease (the “relevant lease”) that would not (apart from this section) be a long funding lease in the case of the resident, and^F1

(d)under the relevant lease, the asset is provided directly or indirectly (but by a lease) to a non-resident.^F1

(2)Subsection (3) applies if the sole or main purpose of arranging matters in that way is to obtain a tax advantage by securing that allowances under this Part are available to a resident by virtue of—^F1

(a)section 67 (hire purchase), or^F1

(b)section 70A (long funding leases).^F1

(3)In any such case, the relevant lease is deemed to be a long funding lease in the case of the resident who is the lessor under it.^F1

(4)The reference in this section to a person obtaining a tax advantage (see section 577(4)) also includes a reference to a person obtaining a tax advantage within the meaning of section 1139 of CTA 2010.^F1F2

(5)In this section—^F1

“non-resident” means a person who—

(a)is not resident in the United Kingdom, and

(b)does not use the plant or machinery exclusively for earning profits chargeable to tax;

“resident” means a person who—

(a)is resident in the United Kingdom, or

(b)uses the plant or machinery exclusively for earning profits chargeable to tax.