Income Tax Act 2007 section 614D

Pre-26 November 1996 schemes and post-25 November 1996 schemes

Section 614D defines how to determine whether a lease of an asset forms part of a pre-26 November 1996 scheme or a post-25 November 1996 scheme, based on the date and status of the written contract.

• A lease forms part of a pre-26 November 1996 scheme only if a written contract existed before that date and met specific conditions regarding finality; otherwise it falls into a post-25 November 1996 scheme
• Under the primary test, the contract must have been unconditional (or any conditions met) before 26 November 1996, with no terms left to agree on or after that date
• Under an alternative test, even if the primary conditions were not fully met, the lease may still qualify as pre-26 November 1996 provided outstanding matters were resolved within a finalisation period and the final contract was not materially different from the original
• The finalisation period ended on the later of 31 January 1997 or six months after the day the contract was made, though HMRC may extend this in individual cases