BLM80110 - Sale of lessor companies and similar arrangements: business of leasing plant or machinery: meaning of carrying on a business of leasing plant or machinery - transactions on or after 23 March 2011
CTA2010 Sections 387 to 391
This guidance covers transactions where the relevant day (the day on which the company ‘changes hands�) is on or after 23 March 2011. For transaction before 23 March see BLM80112.
In most instances it will be obvious when a company is carrying on a business of leasing plant or machinery because that is all the company does. But to give certainty the legislation sets out two conditions. »Ê¹ÚÌåÓýapp company must satisfy one of these conditions in order to be carrying on a business of leasing plant or machinery:
Condition A: At least half of the company’s plant or machinery must be ‘leased out plant or machinery�. See BLM80115.
Condition B: At least half of the company’s income in a specified period must be derived from leasing. See BLM80160.
»Ê¹ÚÌåÓýapp conditions are tested on the relevant day. »Ê¹ÚÌåÓýapp relevant day is the day on which the company changes hands (that is, where there is a qualifying change of ownership). See also the anti-avoidance rules described at BLM82030 onwards.