Defining long funding leases: election: consequences of making an election (SI2007/304 regulation 2(5))
Once an election takes effect, all eligible leases and qualifying incidental leases are treated as long funding leases. All the provisions that apply to long funding leases apply to leases that are treated as long funding leases as a consequence of an election.
The definition of ‘eligible lease’ and ‘qualifying incidental lease’ is covered at BLM24095 onwards.
Once a lessor elects (and assuming the election is not withdrawn), all the lessor’s eligible leases and qualifying incidental leases that are finalised after the date from which the election has effect become long funding leases. This includes all eligible leases and qualifying incidental leases even if, exceptionally, they have also terminated before that date.
Only leases finalised on or after 1 April 2006 may be eligible leases or qualifying incidental leases BLM24055. Only if a lessor commenced trading after 1 April 2006 or had not finalised any leases by that date will all its leases potentially fall within the scope of an election.