The sole purpose of Part II is to ensure that recognition for
tax of rentals from finance leases, which do not have the capacity
to turn income into capital, does not lag behind recognition in the
accounts. It contains no rules about capital allowances disposal
adjustment. Nor are there any 'catching up' provisions equivalent
to paragraph 13 when a lease comes within Part II part way through
its term.
You should make a report to CT & VAT (Technical) where a
lessor exits from a lease within Part II by indirect means which
avoid ordinary disposal adjustments for capital allowances.
