BLM24055 - Defining long funding leases: election: eligible leases: date lease finalised (SI2007/304 regulation 3 condition C)

An election only applies to leases finalised on or after 1 April 2006. The term ‘finalised’ is defined in FA06/SCH8/para23.

A lease is finalised when all the following conditions are met

• there is a contract in writing for the lease between the lessor and the lessee
• either (a) the contract is unconditional, or (b) if it is conditional, the conditions have been met
• no terms remain to be agreed.

A contract is unconditional if there are no events that must occur or conditions that must be satisfied before the parties become bound by the contract. When all the events occur or the conditions are satisfied the contract becomes unconditional at that point.

A contract may become unconditional before the obligation to pay becomes unconditional. For example, payment that is conditional on delivery of the asset does not mean the contract itself is necessarily conditional.