Before you consider the five conditions described in the
following paragraphs you need to establish that 'a lease of an
asset is or has been granted' (FA97/Sch12/Para2(1)(a)). In most
cases the position will be self-evident and only in exceptional
cases will it the point be arguable.
'Lease' is defined in FA97/Sch12/Para30(1) in broad terms
drawn from the sale and leaseback anti-avoidance legislation in
ICTA88/Ss 779-785 (described in BIM61200 and BIM61300). The first
part of the definition (concerning land) is drawn from
ICTA88/S779(12) and the second part (assets other than land) comes
from S785. Asset is defined as 'any form of property or rights'
(Paragraph 30(1)).
Essentially a lease is any agreement or arrangement for the
hiring of any sort of asset, wherever situated and including
intangibles and intellectual property of all descriptions, such as
rights in a film or book.
A lease of land is 'granted' within the meaning of
FA97/Sch12/Para2(1)(a) even though the agreement for a lease may
not be followed up by the formal grant of a lease on completion.
And a lease of an asset other than land is 'granted' simply by the
making of an agreement to hire the asset.
FA97/Sch12 does not apply where the lease is a long funding
lease in the hands of the lessor (FA97/Sch12/Para2(1A))
