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HMRC internal manual

Company Taxation Manual

From
HM Revenue & Customs
Updated
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Particular topics: rent factoring: identification of cases

Rent factoring can take a number of other forms. For instance a company rather than assigning rents, may grant the bank a lease on contrived terms, interposed above the lease of the property to the operating companies. Indicators that may show a company has entered into a rent- factoring transaction include the following:

  • A part disposal of property is accounted for as a loan under FRS5. This treatment may be in the accounts of an individual company or group consolidated accounts.
  • A disposal of the right to future income from property.
  • The granting of a lease on property is accounted for as a loan or a finance lease in either the company granting the lease or the group consolidated accounts.
  • Any unusual transaction involving property where one of the parties is a bank or the subsidiary of a bank, if it has been accounted for as a loan or finance lease under FRS5.