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HMRC internal manual

Business Leasing Manual

Introduction: Leasing: Scope of this manual

This manual provides guidance on the taxation of leasing transactions, particularly those involving plant or machinery. 

In common with many other aspects of taxation the taxation of many leasing transactions depends wholly or in part on the accounting treatment.

This manual therefore gives guidance on lease accounting but it does not attempt to replicate the level of detail that might be found in accounting textbooks.

The creation of this manual has been prompted, in part, by the introduction in FA 2006 of rules for identifying and taxing long funding leases. These rules are complex and this manual may not yet offer all the necessary guidance. The need for further guidance may emerge as issues arise in practice. When these issues are identified the manual will be updated as necessary.