Finance Leasing Manual - FLM31.12

The five conditions to be satisfied simulatenously

The five conditions set out in FLM31.11 have to be satisfied simultaneously (at the 'relevant time') although, in considering whether the fourth condition is satisfied, regard may be had not only to the period of account in which the relevant time falls but also an earlier chargeable period. The relevant time may be before 26 November 1996 (1996 Budget Day). Thus a lease which satisfies the five conditions at a relevant time before that date remains a Part I lease even if there is no subsequent point when it simultaneously meets the conditions.

Once it has satisfied those conditions a lease remains within Part I until it is terminated or assigned to (broadly) an unconnected person, as explained in FLM31.90.