Part 2

Plant and machinery allowances
Chapter 6

Hire-purchase etc. and plant or machinery provided by lessee

Plant or machinery provided by lessee

Plant or machinery provided by lessee
70
1
This section applies if—
a
under the terms of a lease, a lessee is required to provide plant or machinery,
b
the lessee incurs capital expenditure on the provision of that plant or machinery for the purposes of a qualifying activity which the lessee carries on,
c
the plant or machinery is not so installed or otherwise fixed in or to a building or any other description of land as to become, in law, part of that building or other land, and
d
the lessee does not own the plant or machinery.
2
The lessee—
a
is to be treated as being the owner of the plant or machinery, as a result of incurring the capital expenditure, for so long as it continues to be used for the purposes of the qualifying activity, but
b
is not required to bring a disposal value into account because the lease ends.
3
Subsection (4) applies if—
a
the plant or machinery continues to be used for the purposes of the lessee’s qualifying activity until the lease ends,
b
the lessor holds the lease in the course of a qualifying activity, and
c
on or after the ending of the lease, a disposal event occurs in respect of the plant or machinery at a time when the lessor owns the plant or machinery as a result of the requirement under the terms of the lease.
4
The lessor is required to bring a disposal value into account in the appropriate pool for the chargeable period in which the disposal event occurs.
5
“The appropriate pool” means the pool which would be applicable under this Part in relation to the lessor’s qualifying activity if—
a
the expenditure incurred by the lessee had been qualifying expenditure incurred by the lessor, and
b
that qualifying expenditure were being allocated to a pool for the chargeable period in which the disposal event occurs.
6
In this section “lease” includes—
a
an agreement for a lease if the term to be covered by the lease has begun, and
b
any tenancy,
but does not include a mortgage (and “lessee” and “lessor” are to be read accordingly).
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. 3 4) (as amended (20.2.2003) by S.I. 2003/333, art. 14)
S. 45H(2) modified (with effect in accordance with s. 167 of the amending Act) by Finance Act 2003 (c. 14) , Sch. 30 para. 7
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 (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. 9 paras. 10, 22 (with s. 38(2) ); 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)