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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: cumulative accountancy rental excess: interaction with relief in CG computations

In considering the interaction of cumulative accountancy rental excesses with relief in capital gains computations there are two points to note:

  • First, relief for cumulative accountancy rental excess is given against normal rent arising prior to the disposal of a lease (or of an asset representing the leased asset) in priority to relief in the capital gains computation. How this is achieved in drafting terms is explained in BLM72030.
  • Secondly, cumulative accountancy rental excess available for subsequent set-off against normal rent is reduced by any amount deducted in the capital gains computation on an earlier disposal.