Commentary

A7.222 Leasing arrangements

Administration and compliance

A7.222 Leasing arrangements

A7.222 Leasing arrangements

The seventh hallmark concerns leasing arrangements1 and applies with effect from 1 August 2006 to both promoters and in-house schemes. Under this hallmark, arrangements are prescribed where all the following apply2:

  1.  

    •     the arrangements include a plant or machinery lease3

  2.  

    •     one of the specified additional conditions is met4

  3.  

    •     the relevant value condition is met5, and

  4.  

    •     the lease is not a short-term lease6

However, arrangements are not prescribed if7:

  1.  

    •     no person is a promoter in relation to them, and

  2.  

    •     the tax advantage which may be obtained under the arrangements is intended to be obtained by an individual or a business which is a small or medium-sized enterprise

Meaning of 'plant or machinery lease'

HMRC's guidance defines a 'plant or machinery lease', for these purposes, as:

  1.  

    (a)     any agreement or arrangement under which a person (the lessor) grants to another person (the lessee) the right to use plant or machinery for a period, and which, in accordance with generally accepted accounting practice, falls (or would fall) to be treated as a lease8

  2.  

    (b)     any other agreement or arrangement to the extent that, in accordance with generally accepted accounting practice, it falls (or would fall) to be treated as a lease, and the agreement or arrangement conveys

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial