Corporation Tax Act 2010 section 894

Other interpretation of Chapter

Section 894 defines key terms used throughout the chapter, including what counts as a "lease", a "lease of plant or machinery", and a "relevant arrangement".

• "Lease" is defined broadly to include licences, chartering of ships or aircraft, and the hire of any other asset, with "lessor" and "lessee" interpreted accordingly
• "Lease of plant or machinery" includes leases covering plant or machinery together with other property, but excludes leases where the income would be taxed as UK property business profits or where the lessor's expenditure is disqualified from capital allowances because the lease is a long funding lease
• "Relevant arrangement" covers any agreement or arrangement connected with a lease of plant or machinery, whether made before, during, or after the lease period, and "lessor" and "lessee" extend to prospective and former lessors and lessees
• The combined effect of these definitions is to focus the chapter on leases of plant or machinery in a commercial equipment leasing context, rather than property leases or long funding leases where the lessor cannot claim capital allowances