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Before you consider the five conditions described in the following paragraphs you need to establish that ‘a lease of an asset is or has been granted� (CTA10/S901(1)(a)). In most cases the position will be self-evident and only in exceptional cases will it the point be arguable.

‘Lease� is defined in CTA10/S937 in broad terms drawn from the sale and leaseback anti-avoidance legislation in Part 19 of CTA 2010 (described in BIM61200 and BIM61300). The first part of the definition (concerning land) is drawn from CTA10/S846 and the second part (assets other than land) comes from CTA10/S885. Asset is defined as ‘any form of property or rights� (CTA10/S937).

Essentially a lease is any agreement or arrangement for the hiring of any sort of asset, wherever situated and including intangibles and intellectual property of all descriptions, such as rights in a film or book.

A lease of land is ‘granted� within the meaning of CTA10/S901(1)(a) even though the agreement for a lease may not be followed up by the formal grant of a lease on completion. And a lease of an asset other than land is ‘granted� simply by the making of an agreement to hire the asset.

Part 21 do not apply where the lease is a long funding lease in the hands of the lessor (CTA10/S901(1)(a)