Section 923: Pre-26 November 1996 schemes where this Chapter does not at first apply
2734.This section makes provision for recognising income from some finance leases which form part of a “pre–26 November 1996 scheme” as defined in section 930(1)(a). It is based on paragraph 13 of Schedule 12 to FA 1997.
2735.A lease which forms part of a pre–26 November 1996 scheme only falls within this Part if it meets all the conditions in section 902. It does not fall within Chapter 3 as that Chapter only applies to leases which do not form part of a pre–26 November 1996 scheme (see section 927(1)(b) and the definition of a post–25 November 1996 scheme in section 930(1)(b)).
2736.If a lease forming part of a pre–26 November 1996 scheme met all the conditions in section 902 on 26 November 1996, it falls within Chapter 2 for all periods of account beginning, or treated under section 932 as beginning, on or after that date, subject to section 901(3).
2737.But such a lease may not meet all those conditions until after 26 November1996. In that case, this section effects a catching up exercise by taxing under section 905 in the period when the lease is first subject to the rules in Chapter 2 the accumulated excess (if any) of the accountancy measure of income from the lease over the income actually taxed in earlier periods. No such excess relating to periods prior to 26 November 1996 can be taxed in this way nor are the assessments for earlier periods of account actually re–opened. The catching up is done in the period in which the conditions are met.
2738.Subsection (3)(b) provides that for the purposes of this Part the time when the conditions are satisfied forms its own brief period of account. This ensures that the computational provisions in this section work correctly.
2739.Subsection (10) provides for the case where for example there has been an assignment within section 916 and the lessor at an earlier time was within the charge to income tax.
