Section 70YH | “Termination value” ^F1

(1)This section applies where plant or machinery is or has been, or is to be, leased under a long funding lease.

(2)Construe “termination value” in accordance with the following provisions of this section.

(3)The general rule is that the termination value of any plant or machinery is the value of the plant or machinery at or about the time when the lease terminates.

(4)Any reference to calculation by reference to the termination value includes a reference to calculation by reference to any one or more of—

(a)the proceeds of sale, if the plant or machinery is sold after the lease comes to an end,

(b)any insurance proceeds, compensation or similar sums in respect of the plant or machinery,

(c)an estimate of the market value of the plant or machinery.

(5)Any reference to calculation by reference to the termination value also includes a reference to—

(a)determination in a way which, or by reference to factors or criteria which, might reasonably be expected to produce a broadly similar result to calculation by reference to the termination value, or

(b)any other form of calculation indirectly by reference to the termination value.