BIM61110 - Leasing: Finance lessees: leases entered into before 12 April 1991

Where a finance lease was entered into before 12 April 1991 rentals payable in the primary period of the lease may be allocated to periods of account on any of the following bases:

• in the same way as rentals under leases entered into subsequently, or
• on a straight-line basis over the primary period of the lease, or
• where flat-rate rentals are payable, by reference to the period over which each rental payment accrues.

Where a different tax basis (for example, deduction in periods when rentals become due and payable) for leases entered into prior to 12 April 1991 has been accepted in the past no attempt should normally be made to change that basis for such leases.