Capital Allowances Act 2001 section 177

Equipment lessors

Section 177 allows an equipment lessor to be treated as the owner of a fixture for capital allowances purposes, provided certain conditions are met and a joint election is made with the equipment lessee.

• Where conditions in sections 178, 179 or 180 are satisfied, the equipment lessor and lessee are unconnected, and both parties elect, the lessor is treated as the owner of the fixture from the time the capital expenditure is incurred
• If only the section 178 conditions are met and the lessee has not yet started their qualifying activity, the lessor is not treated as owner until the lessee begins that activity
• Once an election is made, the equipment lessee loses their entitlement to be treated as owner of the fixture under section 176
• The election must be notified to HMRC within the normal amendment time limit for income tax returns, or within two years of the end of the relevant chargeable period for corporation tax