Defining long funding leases: election: eligible leases: assignments (SI2007/304 regulation 3 condition I)
In most circumstances a lessor acquires an asset and enters into a lease with the lessee. However, lessors sometimes acquire assets subject to leases and the lease is assigned from the original lessor to a new lessor. This may happen, for example, where the first lessor has the customer contacts but not the capacity to retain the leased equipment for long. Following a similar principle to paragraph (c) of condition E BLM24070, such leases will meet condition I where
- the assignment occurs within 4 months of the commencement of the term of the lease. More than one assignment may be made, but all of them must take place within 4 months of the commencement of the lease term, and
- neither the original lessor nor any other person has claimed or will claim capital allowances on the leased assets.