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HMRC internal manual

Business Leasing Manual

From
HM Revenue & Customs
Updated
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‘Income-into-capital’ schemes and back loaded leases: Capital allowances: avoidance of balancing adjustments - 'major lump sum'

The provisions in CTA10/SS916-922 are triggered by the occurrence of an occasion on which a ‘major lump sum’, as defined in Condition B at CTA10/S902(5), becomes payable.

In summary, a major lump sum is a sum, excluding any element which is rent, which under GAAP is regarded as consisting partly of repayment of the lessor’s investment in the leased asset and partly of return on that investment. It may be received not only by the lessor but also by a connected person of the lessor. See BLM70516 for more details.