2(1)Section 387 (“business of leasing plant or machinery”) is amended as follows.
(2)In subsection (3), for “qualifying leased plant or machinery” substitute “plant or machinery falling within subsection (7)”.
(3)For subsection (5) substitute—
“(5)Condition B is that at least half of the relevant company’s income in the past 12 months derives from plant or machinery falling within subsection (7).”
(4)For subsections (7) and (8) substitute—
“(7)Plant or machinery falls within this subsection if—
(a)it is or at any time in the past 12 months has been leased out by the relevant company or a qualifying associate,
(b)the lease under which it is or has been leased out is a plant or machinery lease but not an excluded lease of background plant or machinery for a building (see section 437(3)), and
(c)if the plant or machinery satisfies paragraph (a) only because it is or has been leased out by a qualifying associate, the lessee under the lease is or was someone other than the relevant company.
(8)For the purposes of subsection (7)—
(a)plant or machinery is “leased out” by a person if it is subject to a plant or machinery lease under which that person is a lessor,
(b)“associate” means a person connected with the relevant company (see also subsection (9)), and
(c)a person is a “qualifying associate” if the person is an associate at the start of the relevant day or at any earlier time in the past 12 months (whether or not a time when the plant or machinery was leased out by the person).
(9)If the relevant company is owned by a consortium or is a qualifying 75% subsidiary of a company owned by a consortium, the reference in subsection (8)(b) to a person connected with the relevant company also includes—
(a)any member of the consortium, and
(b)any person connected with such a member.
(10)A reference in this section to the past 12 months is to the period of 12 months ending with the relevant day.”