FA00/SCH22/PARA92

(1) The lessor under the lease is not entitled to capital allowances if the lease is part of sale and lease-back arrangements.

(2) For this purpose ‘sale and lease-back arrangements’ means, subject to sub-paragraph (3) and(3A)*1, any arrangements that take the following form:

Step One

The ship is owned by a tonnage tax company and used for the purposes of its tonnage tax trade.

Step Two

A transaction is entered into, as a result of which (apart from this paragraph) capital allowances would become available to the lessor, under which-

(a)the ship (or an interest in it) is sold, or

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