ICTA88/S87 (8) prohibits a trading deduction if the amount chargeable on the lessor arises by reason of the lessee's obligation to carry out work which:
The prohibition should also be regarded as applying where
renewals allowance was claimed as an alternative to capital
allowances (
BIM46935).
No trading deduction should be allowed in respect of a
payment which the lessee is required to make to the lessor for
assets qualifying for capital allowances (or, alternatively,
renewals allowance), notwithstanding that the lessor is chargeable
under ICTA88/S34 (1), by reference to the excess of the payment
over the actual worth of the asset.
