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HMRC internal manual

Business Leasing Manual

Taxation of leases that are not long funding leases: finance lessees: asset not depreciated: multiple asset leases

Where a number of assets are subject to a single lease and those assets have divergent economic lives, varying rates of depreciation will be applied to each asset in the lessee’s accounts. Should it be necessary to do so, the rentals may be apportioned on a systematic and reasonable basis to the various assets.

Where the lease of a non-depreciating building (see BLM32710)also includes the fixtures in it and those fixtures are depreciated over the term of thelease in accordance with correct accounting practice, the depreciating andnon-depreciating elements may be dealt with separately so that relief can be obtained forthe fixtures which depreciate.

Under the general law of property, fixtures which are leased normally belong to the lessee and may be kept in use by the lessee after the lease ends. Particular problems of fixtures leasing are discussed at BLM34005.