Capital Allowances Act 2001 section 228A

Application of sections 228B to 228C

Section 228A defines what constitutes a "lease and finance leaseback" of plant or machinery and sets out when the anti-avoidance rules in sections 228B and 228C apply.

• A lease and finance leaseback arises where a person (S) leases plant or machinery to another person (B), and the asset then continues to be used by or on behalf of S, or is leased back, under a finance lease arrangement.
• The continued use of the plant or machinery after the lease must be a direct consequence of it having been leased under a finance lease.
• For the arrangement to fall within these rules, S must grant B rights over the plant or machinery in return for consideration, and S must not be required to bring all of that consideration into account for capital allowances purposes.
• Where all these conditions are met, sections 228B and 228C impose restrictions on the income, profits and deductions that may be claimed by the parties involved.