C1C5C4C3C7C8C9C10C13C14C16Part 2 Plant and machinery allowances
Pt. 2 restricted (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 9 paras. 10, 22 (with s. 38(2) ); S.I. 2004/2575 , art. 2(1) , Sch. 1
Pt. 2 modified (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 9 paras. 9(2), 21(2) (with s. 38(2)); S.I. 2004/2575, art. 2(1) , Sch. 1
Pt. 2 restricted (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 4 para. 4 ; S.I. 2004/2575 , art. 2(1) , Sch. 1
Pt. 2 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 para. 19
Pt. 2 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 para. 35
Pt. 2 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 paras. 36, 37
Pt. 2 modified (21.7.2009) by Finance Act 2009 (c. 10), s. 24
Pt. 2 modified (17.7.2013) by Finance Act 2013 (c. 29), s. 73(7)-(11) (with s. 73(6))
Pt. 2 modified (10.6.2021) by Finance Act 2021 (c. 26), s. 9(1)(a)
Pt. 2 modified (11.7.2023) by Finance (No. 2) Act 2023 (c. 30), s. 7
C6C11C12C14C15F1Chapter 6AInterpretation of provisions about long funding leases
Pt. 2 Ch. 6A inserted (with effect in accordance with Sch. 8 para. 15 of the amending Act) by Finance Act 2006 (c. 25), Sch. 8 para. 7
Pt. 2 Ch. 6A applied (21.7.2008) by Finance Act 2008 (c. 9), Sch. 20 para. 11(12)
Pt. 2 Ch. 6A applied (21.7.2009) by Finance Act 2009 (c. 10), Sch. 33 para. 9(c)
Pt. 2 Ch. 6A applied (1.4.2010) (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 381(1), 1184(1) (with Sch. 2)
Pt. 2 Ch. 6A modified (10.6.2021) by Finance Act 2021 (c. 26), s. 17
Interpretation
70YFThe “term” of a lease
1
The term of a lease is the period comprising—
a
so much of the post-commencement period as is a non-cancellable period, and
b
any subsequent periods which meet the conditions in subsection (2).
2
The conditions are that—
a
the lessee has an option to continue to lease the asset for the period (whether with or without further payment), and
b
it is reasonably certain, at the inception of the lease, that the lessee will exercise that option.
3
The “post-commencement period” is so much of the period of the lease as begins with the commencement of the term of the lease.
4
A “non-cancellable period” is any period during which the lessee may terminate the lease only—
a
upon the occurrence of some remote contingency, or
b
upon payment by the lessee of such an additional amount that, at the inception of the lease, continuation of the lease is reasonably certain.
5
If, at the commencement of the term of the lease,—
a
the market value of the asset exceeds £1 million, and
b
the estimated market value of the asset F27 years after the commencement of the term of the lease is more than half of the market value of the asset at the commencement of the term of the lease,
subsection (6) applies.
6
If, in any such case, the term of the lease (apart from this subsection) would be F37 years or less, but—
a
the lessee has one or more options to continue to lease the asset,
b
on the assumption that it is reasonably certain, at the inception of the lease, that the lessee will exercise those options, the term of the lease would exceed 7 years, and
c
on failing to exercise any one of those options, the lessee may be required to make a payment to the lessor,
it is to be assumed for the purposes of this section that any option to continue to lease the asset will be exercised, unless it is reasonably certain, at the inception of the lease, that the option will not be exercised.
F47
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
See also section 70YC(5) (extension, for certain purposes, of term of lease that is not a long funding lease).
Pt. 2 modified (24.2.2003) by Proceeds of Crime Act 2002 (c. 29), s. 458(1), Sch. 10 para. 12 (with Sch. 10 para. 17(1)); S.I. 2003/120, art. 2, Sch. (with arts. 34) (as amended (20.2.2003) by S.I. 2003/333, art. 14)