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Avoidance involving international leasing

The first¹ is designed to prevent the use of cross-border international leasing structures to extract value from the capital allowances which would otherwise be available. It applies where a non-resident leases plant or machinery (whether directly or indirectly) to a UK resident, the lease to the latter is a long funding lease or a contract within CAA 2001, s 67 (see B3.340A), the UK resident uses the plant or machinery to lease it under a lease which would not (apart from the anti-avoidance provision) be a long funding lease, and the asset in question is leased or sub-leased to a non-resident². If the sole or main purpose of arranging matters in that way is to obtain a tax advantage³ by obtaining capital allowances for a UK resident in respect either of a hire purchase or similar contract, or a long funding lease, the lease of the asset from the UK resident