Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Business Leasing Manual

HM Revenue & Customs
, see all updates

‘Income-into-capital’ schemes and back loaded leases: Introduction to 'income-into-capital' schemes: Chapter 3 of Part 21 of CTA 2010 - back-loaded finance leases

Chapter 3 of Part 21 of CTA 2010 is concerned with the deferral of tax generated by back-loaded finance leases. These are leases where the rentals start low and increase over time. At the end of the day the lessor gets back the full capital cost of the asset (the ‘loan’) plus a commercial rate of interest. The interest charge is more than under a conventional ‘straight-line’ lease (where the rental payments are constant). This is because the ‘loan’ is not repaid as fast and so the interest charge is larger.