Subject to meeting the other conditions in regulation 3, an
election applies to plant or machinery that is new (unused and not
second-hand) at the commencement of the term of the lease.
The ‘commencement’ of the term of a lease is the
date on and after which the lessee is entitled to use the complete
leased asset under the lease and for this purpose an asset is to be
regarded as complete if its construction is substantially complete
(CAA01/S70YI).
The use of the term ‘substantially complete’
means that relatively minor works that may be needed following the
date when the lessee is entitled to use the asset do not delay the
date of commencement of the lease term.
However, in many cases, limiting the election to new plant or
machinery would be too restrictive to make the election of
practical use. Therefore a lease may also be an eligible lease in
three other circumstances
The lease may be an eligible lease if the plant or machinery is not new but replaces similar plant or machinery, see BLM24075.
