Finance Leasing Manual - FLM36.16

Catching-up charge: 'existing' lease first comes within Part I

A 'catching up' charge may be necessary when an 'existing' lease first comes within Part I after 26 November 1996. Paragraph 13 Schedule 12 FA 1997 deals with an 'existing' lease which is not found to be a Part I lease when the test is initially applied as at 26 November 1996 but which later satisfies the conditions in Paragraph 3 and so becomes a Part I lease. Paragraph 13 imposes a 'catching up' charge at the point the conditions are first satisfied. Thereafter the other rules in Part I apply in the usual way.