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HMRC internal manual

Business Leasing Manual

HM Revenue & Customs
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Taxation of leases that are not long funding leases: tax advantages: where the borrower or lessee is not liable to tax

Where the borrower or lessee are not liable to tax their tax bills will both be nil. Forthe lender and lessor the net taxable profit at the end of the day remains the interest turn in both cases - £20 in the examples at BLM30040.