Finance Leasing Manual - FLM37.05

Definition of a lease within Part II Schedule 12

The definition to be satisfied for a lease to come within Part II is to be found in Paragraph 16 Schedule 12 FA 1997. Four conditions have all to be satisfied:

• the lease was granted on or after 26 November 1996;

• the lease forms part of a 'new scheme';

• the condition in Paragraph 3(1) - that the lease must be treated as a finance lease or loan - must have been satisfied on or after 26 November 1996; and

• the lease does not come within Part I.

The four conditions are discussed in turn in the paragraphs that follow.