New and improved

LONG FUNDING LEASES of plant and machinery (Schedule 8) began proceedings of the eleventh sitting. Theresa Villiers was concerned that the new provisions would restrict capital allowances where a transaction was entered for non-nefarious purposes. In response John Healey said that the new provisions were 'new and improved'. The aims of the new regime were to:

• ensure that tax-motivated distortions in the choice of finance were minimised;
• open up new opportunities by increasing the market for overseas leasing;
• counter exploitation of the rules; and
• ensure that the legislation is EU compliant.

He had some amendments to make. First a Treasury order would add further details to 'background plant or machinery'. Another amendment would ensure that lessors would not be able to move to the UK to exploit the capital allowances regime. An amendment suggested by the...