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HMRC internal manual

Business Leasing Manual

’Income-into-capital’ schemes and back loaded leases: Capital allowances: machinery and plant

The rules in CTA10/SS917-922 which restrict the disposal value to, essentially, the cost of the asset were summarised in the article on Schedule 12 (now Part 21 of CTA 2010) in the April 1997 issue of Tax Bulletin as follows:

`The principal effect paragraph 11(4) to (7) (now CTA10/S918) is essentially that the sum brought into the pool of expenditure on machinery and plant under the paragraph cannot exceed the capital cost of the asset in question to the lessor. Where there are a series of disposals (including disposals under the ordinary capital allowances rules) the effect is that the sums brought into the pool cannot in aggregate exceed cost`