Section 614CB | Leases to which this Chapter applies ^F1

(1)This Chapter applies if—

(a)a lease of an asset is or has been granted on or after 26 November 1996,

(b)the lease forms part of a post-25 November 1996 scheme,

(c)condition A in section 614BC is or has been met at some time on or after 26 November 1996 in relation to the lease in a period of account of the current lessor (“L”), and

(d)Chapter 2 does not apply in relation to the lease because of the other conditions in that section not all being, or having been, met as mentioned in section 614BB.

(2)For the meaning of “forming part of a post-25 November 1996 scheme”, see section 614D.

(3)This Chapter does not apply so far as, in relation to L, the lease falls to be regarded as a long funding lease for the purposes of Part 2 of CAA 2001 (plant and machinery allowances) in accordance with Chapter 6A of that Part (interpretation of provisions about long funding leases) (see section 70G of that Act).

(4)If condition A in section 614BC has been met at any time on or after 26 November 1996 in a period of account of the person who was at that time the lessor, it is taken to continue to be met unless and until one of the conditions in subsection (5) is met.

(5)The conditions are that—

(a)the asset ceases to be leased under the lease, or

(b)the lessor's interest under the lease is assigned to a person who is not connected with any of the persons specified in subsection (6).

(6)Those persons are—

(a)the assignor,

(b)any person who was the lessor at some time before the assignment, and

(c)any person who at some time after the assignment becomes the lessor pursuant to arrangements made by a person who was the lessor, or was connected with the lessor, at some time before the assignment.

(7)If at any time the person who was the lessor at that time was a person within the charge to corporation tax on income—

(a)the reference in subsection (4) to condition A in section 614BC having been met at that time includes a reference to condition A in section 902 of CTA 2010 having been so met, and

(b)the reference in subsection (1)(d) to the other conditions in section 614BC not having been met as mentioned in section 614BB includes a reference to the other conditions in section 902 of that Act not having been met as mentioned in section 901 of that Act.

(8)Nothing in subsection (4) prevents this Chapter from applying again in relation to the lease where the lessor's interest is assigned if the conditions for its application are met after the assignment.