Capital Allowances Act 1990

40Meaning of “short-term leasing” and “the requisite period”

(1)In this Chapter “short-term leasing”, in relation to any machinery or plant, means leasing the machinery or plant in such a manner—

(a)that—

(i)the number of consecutive days for which it is leased to the same person will normally be less than 30, and

(ii)the total number of days for which it is leased to the same person in any period of 12 months will normally be less than 90, or

(b)that—

(i)the number of consecutive days for which it is leased to the same person will not normally exceed 365, and

(ii)subject to subsection (2) below, the aggregate of the periods for which it is leased in the requisite period to lessees in circumstances not falling within section 39(2) will not exceed two years.

(2)In a case where the requisite period exceeds four years the reference in subsection (1)(b)(ii) above to that period shall be construed as a reference to any period of four consecutive years which falls within the requisite period.

(3)For the purposes of subsection (1) above, persons who are connected with each other shall be treated as the same person and where any machinery or plant is leased as one of a number of items which form part of a pool of items of the same or a similar description and are not separately identifiable, all the items in the pool may be treated as used for short-term leasing within the meaning of that subsection if substantially the whole of the items in the pool are so used.

(4)For the purposes of this Chapter the requisite period is—

(a)in the case of expenditure not falling within paragraph (b) below, the period of four years beginning with the date on which the machinery or plant is first brought into use by the person who incurred the expenditure, or

(b)in the case of—

(i)new expenditure, or

(ii)old expenditure as respects which section 70(3) of the [1982 c. 39.] Finance Act 1982 had effect,

the period of ten years beginning with the date on which the machinery or plant is first brought into use by the person who incurred the expenditure;

except that where the machinery or plant ceases to belong to that person at any time before the end of those four years or ten years (as the case may be), the requisite period shall end at that time.

If the circumstances are such that machinery or plant is used for a qualifying purpose, this subsection shall have effect with the substitution for each reference to ten years of a reference to four years.

(5)For the purposes of subsection (4) above, machinery or plant shall be treated as continuing to belong to the person who incurred the expenditure so long as it belongs to—

(a)a person who is connected with him, or

(b)a person who acquired it from him as a result of one or more disposals on the occasion of which, or each of which, the trade carried on by the person making the disposal was treated as continuing by virtue of section 113(2) or 114(1) of the principal Act.