TNAG-1490-FCO40-2047-Hong-Kong-Inland-Revenue-(Amendment)-Bill-1986-1986 — Page 76

"associate", in relation to a person holding rights as lessee under any

lease of machinery or plant, means--

(a) where the person holding such rights is a natural person- (i) a relative of the person holding such rights;

(ii) a partner of the person holding such rights and any relative of that partner;

(iii) a partnership in which the person holding such rights is a partner;

(iv) any corporation controlled by the person holding such rights, by a partner of the person holding such rights or by a partnership in which the person holding such rights is a partner;

(v) any director or principal officer of any such tion as is referred to in sub-paragraph (iv);

corpora-

(b) where the person holding such rights is a corporation—

(i) any associated corporation;

(ii) any person who controls the corporation and any partner of such person, and, where either such person is a natural person, any relative of such person;

(iii) any director or principal officer of that corporation or of any associated corporation and any relative of any such director or officer;

(iv) any partner of the corporation and, where such partner is a natural person, any relative of such partner; (c) where the person holding such rights is a partnership-

(i) any member of the partnership and, where such member is a natural person, any relative of such member;

(ii) any partner of the partnership and, where such partner is a natural person, any relative of such partner and, where such partner is a partnership, any relative of any member of that partnership who is a natural person;

(iii) any corporation controlled by the partnership or by any partner thereof or, where such a partner is a natural person, any relative of such partner;

(iv) any corporation of which any partner is a director or principal officer;

(v) any director or principal officer of a corporation referred to in sub-paragraph (iii);

"associated corporation" means—

(a) a corporation over which the person holding rights under

any lease of machinery or plant has control;

(b) a corporation which has control over such person holding

rights, being a corporation;

(c) a corporation which is under the control of the same person

as such person holding rights, being a corporation;

"beneficiary under the trust" means, where the trustee holds machin- ery or plant on behalf of a beneficiary who is himself a trustee in respect of that machinery or plant, the beneficiary for whom such machinery or plant is ultimately held, being the person who has the use of, or the right to use, such machinery or plant for his own benefit;

"conditional sale agreement" means an agreement for the sale of goods under which the purchase price or part of it is payable by instalments, and the property in the goods remains in the seller

(notwithstanding that the buyer is to be in possession of the goods) until such conditions as to the payment of instalments or otherwise as may be specified in the agreement are fulfilled; "control", in relation to a corporation, means the power of a person

to secure-

(a) by means of the holding of shares or the possession of voting power in or in relation to that or any other corpora- tion; or

(b) by virtue of any powers conferred by the articles of associa- tion or other document regulating that or any other corporation,

that the affairs of the first-mentioned corporation are conducted in accordance with the wishes of that person;

"end-user" means any person (whether alone or with others) holding rights as lessee under a lease of machinery or plant or any associate of such person;

"held for use" includes installed ready for use and held in reserve;

"lease" includes-

(a) any arrangement under which a right to use machinery or plant is granted by the owner of the machinery or plant to another person; and

(b) any arrangement under which a right to use machinery or plant, being a right derived directly or indirectly from a right referred to in paragraph (a), is granted by a person to another person,

but does not include a hire-purchase agreement or a conditional sale agreement unless, in the opinion of the Commissioner, the right under the agreement to purchase or obtain the property in the goods would reasonably be expected not to be exercised; "non-recourse debt", in relation to the financing of the whole or a predominant part of the cost of the acquisition or construction of any machinery or plant, means a debt where the rights of the creditor in the event of default in the repayment of principal or payment of interest-

(a) are limited wholly or predominantly to any or all of the

following-

(i) rights (including a right to moneys payable) in rela- tion to the machinery or plant or the use of the machinery or plant;

(ii) rights (including rights to moneys payable) in rela- tion to goods produced, supplied, carried, transmitted or delivered, or services provided, by means of the machinery or plant;

(iii) rights (including a right to moneys payable) in relation to the loss or disposal of the whole or a part of the machinery or plant or of the taxpayer's interest in the machinery or plant;

(iv) any conjunction of such rights as are referred to in sub-paragraphs (i), (ii) and (iii);

(v) rights in respect of a mortgage or other security over the machinery or plant; or

(vi) rights arising out of any arrangement relating to the financial obligations of the end-user of the machinery or plant towards the taxpayer, being financial obligations in relation to the machinery or plant;