Capital Allowances Act 2001 section 122

Short-term leasing by buyer, lessee, etc

Section 122 identifies the circumstances in which plant or machinery used for short-term leasing is treated as being used for a qualifying purpose under the overseas leasing rules.

• Plant or machinery is used for a qualifying purpose when it is used for short-term leasing by the person who originally spent money on it, or by someone connected with that person
• It is also a qualifying purpose if the plant or machinery has been acquired through a business succession where continuity conditions are met, and the new owner uses it for short-term leasing
• A UK-resident lessee who uses the plant or machinery for short-term leasing is also treated as using it for a qualifying purpose
• A non-UK-resident lessee can also satisfy the qualifying purpose test provided they carry on a qualifying activity in the United Kingdom and use the plant or machinery for short-term leasing in the course of that activity