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HMRC internal manual

Business Leasing Manual

HM Revenue & Customs
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‘Income-into-capital’ schemes and back loaded leases: Definition of a Chapter 2 of Part 21 of CTA 2010 lease: Condition A: circumstances in which deemed different treatment in consolidated accounts

The effect of CTA10/S935 (see BLM70485) is that consolidated group accounts in accordance with GAAP are only deemed into existence where you can identify a company incorporated outside the UK which comes within the definition of a ‘parent undertaking’ (CTA10/S935(3)).

In practice this situation is most likely to arise where the lessor is the UK resident subsidiary of a foreign parent company (which would not be subject to the UK Companies Act detailed accounting requirements).