Capital Allowances Act 2001 section 67

Plant or machinery treated as owned by person entitled to benefit of contract, etc.

Section 67 deals with how plant or machinery is treated as owned for capital allowances purposes when a person has a contract under which they will or may eventually become the legal owner of the asset.

• Where a person incurs capital expenditure on plant or machinery under a contract that provides they shall or may become the owner on performance of the contract, they are treated as owning the asset for capital allowances purposes while they hold the benefit of that contract.
• If the contract is accounted for as a lease under generally accepted accounting practice, the deemed ownership treatment only applies where the contract is classified as a finance lease (or, for right-of-use leases, would be classified as a finance lease if that test were required).
• When the plant or machinery is first brought into use for the qualifying activity, the person is treated as having incurred at that point all future capital expenditure still to be paid under the contract — effectively accelerating the allowances claim.
• If the person ceases to hold the benefit of the contract without actually becoming the legal owner of the asset, they are treated as ceasing to own it at that point, and multiple linked agreements can be treated as a single contract for these purposes.