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 FA06/SCH10/PARA6
sets out two conditions. The 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 qualifying plant or machinery, that is, plant or
machinery subject to a lease. See
BLM80115.
Condition B: At least half of the company's income in a
specified period must be derived from leasing. See
BLM80160.
The conditions are tested on the relevant day. The 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.
