Capital Allowances Act 2001 section 70W

Transfers, assignments etc by lessor

Section 70W deals with what happens for capital allowances purposes when the lessor of plant or machinery transfers the asset to another person who then becomes the new lessor under an existing or replacement lease.

• When a lessor transfers leased plant or machinery to a new lessor during the lease term, the old lease is treated as terminating immediately before the transfer and the new lease as starting immediately after it
• The transfer date is treated as both the inception date and the commencement of the term of the new lease for the new lessor
• If the new lease covers the unexpired portion of the old lease on the same financial terms, it inherits the same classification — long funding lease or non-long funding lease — as the old lease had for the old lessor
• Where those conditions are met, the lessee is treated as if the old and new leases were one single continuing lease, and "transfer" is broadly defined to include any disposal, termination of interest, or cessation of fixture ownership

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