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HMRC internal manual

Business Leasing Manual

’Income-into-capital’ schemes and back loaded leases: Bad debts: where accountancy rentals exceed normal rent

Where in the case of a lease: 

  • accountancy rental earnings exceed normal rent; and
  • a bad debt deduction exceeding the accountancy rental earnings is given,

any cumulative accountancy rental excess brought forward is reduced by the amount by which the bad debt deduction exceeds the accountancy rental earnings for the period. (CTA10/S911).