FA97/Sch12/Part II is concerned with the deferral of tax
generated by back-loaded finance leases. These are leases where the
rentals start low and increase over time. At the end of the day the
lessor gets back the full capital cost of the asset (the 'loan')
plus a commercial rate of interest. The interest charge is more
than under a conventional 'straight-line' lease (where the rental
payments are constant). This is because the 'loan' is not repaid as
fast and so the interest charge is larger.
