Capital Allowances Act 2001 section 70A

Entitlement to capital allowances

Section 70A establishes that a lessee under a long funding lease can claim capital allowances on plant or machinery as if they owned the asset, and sets out how the amount of qualifying capital expenditure is determined.

• Where a person incurs expenditure on plant or machinery under a long funding lease for a qualifying activity, the lessee is treated as owning the asset for capital allowance purposes throughout the lease term
• This deemed ownership applies regardless of whether the lease is also treated as a long funding lease from the lessor's perspective
• The lessee is treated as having incurred capital expenditure at the commencement of the lease term, with the amount determined differently depending on the type of lease
• For a long funding operating lease the expenditure amount is calculated under section 70B, while for a long funding finance lease it is calculated under section 70C