In broad terms, lessees under long funding leases are treated
as having bought the asset. This allows a lessee to claim plant or
machinery allowances, see
BLM42010 and CA23800
The amount of rentals that is allowed as a deduction in
computing profits is restricted to compensate for the availability
of capital allowances, see
BLM42025 and BLM42040
As with lessors (
BLM40005), the tax rules depend on
whether the lease is a long funding finance lease or a long funding
operating lease.
