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HMRC internal manual

Business Leasing Manual

LFLs: commencement and transition: transitional rules: FA06/Sch8/Para15


  • a lease is finalised on or after 1 April 2006, or
  • the term of a lease commences on or after 1 April 2006

the lease will be a long funding lease unless it is what is known as an excepted lease (and assuming, of course, that it meets the requirements of CAA01/S70G).

Broadly speaking an excepted lease is a lease that was planned and agreed to in principle (but not finalised) by 21 July 2005 and which was finalised and had commenced by 1 April 2007 in roughly the form envisaged on 21 July 2005. In some cases the time limit is extended to 1 April 2009. Further guidance is at BLM23030.

Where the term of a lease of plant or machinery began before 1 April 2006 and that plant or machinery is brought into use for a qualifying activity on or after 1 April 2006 see BLM23020. This will most often happen where a lessor or lessee moves to the UK, but could happen in other circumstances.