Taxation of leases that are not long funding leases: sale and leaseback: tax treatment of leaseback
Until FA 2004, rentals under lease-back arrangements were generally deductible as under any other finance lease, subject to the guidance on defeasance arrangements (see BLM35065). But even outside defeasance situations it may sometimes be appropriate to consider in more detail the deductibility of rents payable under the lease-back under the general rules for deductions. There is also specific legislation on sale and lease-back transactions in CTA10/Ss834-882, see BIM61200 and BIM61300.
Following FA 2004, for pre 8 October 2007 lease only, deductions for rentals under leaseback arrangements may be restricted by CAA01/S228B, see CA28920.