Taxation of leases that are not long funding leases: finance lessees: general issues: depreciation method used
Commercial depreciation is arrived at in accordance with FRS15 (Tangible fixed assets) or IAS 16 (Property, plant and equipment) and IAS 38 (Intangible assets), in conjunction with SSAP 21 or IAS 17. This is very much an accountancy issue but one which can have significant tax effects. Particular lines of enquiry which may be worth considering are mentioned at BLM32055, and there is further guidance at BLM32500. In all cases early input from your advisory accountant is important.