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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: 'Income-into-capital' schemes: finance lessee's position

The lease in an income-into-capital scheme is likely to be a finance lease from the lessee’s (borrower’s) end and relief for payments is given on the normal SP3/91 basis. However, any sum paid for the property under an option is capital, and so no revenue deduction is due for the payment.