Section 901 | Application of this Chapter

(1)This Chapter applies if—

(a)a lease of an asset is or has been granted, and

(b)the conditions in section 902 are or have been met in relation to the lease at some time in a period of account of the current lessor.

(2)But this Chapter does not apply so far as, in relation to the current lessor, 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).

(3)If the conditions in section 902 have been met at some time in a period of account of the person who was at that time the lessor, they are taken to continue to be met for the purposes of this Chapter unless and until one of the conditions in subsection (4) is met.

(4)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 (5).

(5)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.

(6)If at any time the person who was the lessor at that time was a person within the charge to income tax, the reference in subsection (3) to the conditions in section 902 having been met at that time includes a reference to the conditions in section 614BC of ITA 2007 having been so met.

(7)Nothing in subsection (3) 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.