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HMRC internal manual

Business Leasing Manual

Defining long funding leases: election: following the accounts: lessors with eligible and non-eligible leases

Lessors may have leases that are not eligible and so outside the scope of an election. Where this is the case, the figures in the accounts would need to be analysed to enable the necessary apportionments to be made.

In practice, it is unlikely that a lessor in this situation would gain any benefit from attempting to base its profits on figures in the accounts, rather than following the strict statutory basis. However each case should be looked at on its own merits.

The overriding principle is that the lessor should be taxed on an appropriate amount of profit. How that profit is calculated is less important than that it is correct.

You should refer cases of doubt or difficulty to CTISA (CT&BIT) for advice.