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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: Relief for set-offs against rentals: avoidance of double taxation - function of the rental excess reliefs

The function of the two reliefs in the scheme of Part 21 of CTA 2010 is different:

  • The relief for cumulative accountancy rental excess is intended to ensure that there is no double taxation of the lessor’s return from the lease (see BLM72015).
  • The relief for cumulative normal rental excess is of much narrower application. Its purpose is merely to ensure that negative depreciation for a period is not taxed under the Schedule (as part of ‘accountancy rental earnings’) to the extent that it can be franked by accumulated positive depreciation from earlier periods (see BLM72110).