Where the leasing was taxable under trading income rules,
lessors argued that their taxable earnings could not be more than
the rent actually receivable under the lease for the accounting
period. This was a tenable view but we believed that the better
view was to follow the accountancy as far as possible, as was done
for rental payments by lessees in
Gallagher v Jones in 1993 (66 TC 77). The
technical argument was not resolved. But FA97/Sch 12 effectively
applied HMRC's view by statute.
