6(1)Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows.U.K.
(2)In section 13(5) (use for qualifying activity of plant or machinery provided for other purposes), omit “or 224”.
(3)In section 52(5) (first-year allowances), omit “, 223”.
(4)In section 57(3) (available qualifying expenditure), omit “224(1),”.
(5)In section 66 (provisions referred to in section 60(1)(b)), omit the entry relating to section 222.
(6)In section 70I (meaning of “short lease”), after subsection (9) insert—
“(10)Where plant or machinery is the subject of a sale and finance leaseback (as defined in section 221), any finance lease of a kind mentioned in section 221(1)(c) is not a short lease (if it otherwise would be).
(11)But, if the conditions set out in section 227(2) are met, B and S (within the meaning of section 221) may make an election the effect of which is that—
(a)subsection (10) above does not apply,
(b)section 228(2) and (3) apply in relation to B (but this does not prevent section 225 from applying), and
(c)section 228(5) applies in relation to S.
(12)Subsections (4) to (6) of section 227 apply in relation to elections under this section as they apply in relation to elections under that section.”
(7)In section 89(3)(b) (disposal to connected person), for “sections 222 to” substitute “ section ”.
(8)In section 217 (no first-year allowance for B's expenditure), for subsection (3) substitute—
“(3)This section does not apply if plant or machinery is the subject of a sale and finance leaseback (as defined in section 221).”
(9)In section 218 (restriction on B's qualifying expenditure), for subsection (4) substitute—
“(4)This section does not apply if plant or machinery is the subject of a sale and finance leaseback (as defined in section 221), but see section 225.”
(10)In section 219(1) (meaning of “finance lease”), omit “and which are not a long funding lease in the case of the lessor”.
(11)In section 221(1) (meaning of “sale and finance leaseback”), for “sections 222 to 228” substitute “ section 225 ”.
(12)Omit—
(a)section 222 (disposal value restricted),
(b)section 223 (no first-year allowance for B's expenditure),
(c)section 224 (restriction on B's qualifying expenditure), and
(d)section 226 (qualifying expenditure limited in subsequent transactions).
(13)In section 227 (circumstances in which election may be made)—
(a)in subsection (1)(b), omit sub-paragraph (ii) (and the “or” before it), and
(b)in subsection (2)(c), for “217, 218, 223 or 224” substitute “ 217 or 218 ”,
and the heading before that section accordingly becomes “ Sale and leaseback: election for special treatment ”.
(14)In section 228 (effect of election: relaxation of restriction on B's qualifying expenditure, etc)—
(a)in subsection (1), omit “or 224”, and
(b)omit subsection (4).
(15)In section 230(2) (exception for manufacturers and suppliers), for “sections 222 to” substitute “ section ”.
(16)In section 241(1)(b) (no first-year allowance in respect of additional VAT liability), omit “or 223(1)”.
(17)Omit section 243 (restriction on B's qualifying expenditure: sale and finance leaseback).
(18)In section 774E(6) of ICTA (structured finance arrangements: exceptions), omit the second sentence.
(19)The amendments made by this paragraph have effect in the case of plant or machinery which is the subject of a sale and finance leaseback (as defined in section 221 of CAA 2001) where the date of the transaction (within the meaning of that section) is on or after 9 October 2007.
(20)In the case of plant or machinery which is the subject of a sale and finance leaseback (as defined in section 221 of CAA 2001) where the date of the transaction (within the meaning of that section) is before 12 March 2008, section 70I(10) of CAA 2001 has effect as if for “any finance lease of a kind” there were substituted “ the finance lease ”.