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HMRC internal manual

Business Leasing Manual

Introduction: Leasing: What is leasing?

A lease is an agreement whereby one person (the lessor) hires an asset to another (the lessee) for a series of rental payments over an agreed period of time.

Leasing can cover anything from the hiring of a power tool for a day or so through the hiring of a car for months to the hiring of a fleet of aircraft for decades or the hire of a building for centuries. Where assets are hired for longer periods they are usually referred to as being ‘leased’ rather than ‘hired’ but there is no clear distinction between the two terms.

This manual is mostly concerned with the leasing of plant or machinery. The majority of guidance on taxing the leasing of real property (buildings and land) is to be found in the Property Income Manual.

This manual does, however, cover particular issues concerning the finance leasing of real property. See, in particular

  • BLM20300 onwards, for guidance where plant or machinery is leased with land and where the plant or machinery element is a long funding lease.
  • BLM70000 onwards, for guidance on anti-avoidance legislation in Part 21 CTA 2010 / Part 11A ITA 2007 that was directed at schemes often - but not always - involving land.