Finance Leasing Manual - FLM13.30

Sale and leaseback: sale of asset for more than original cost

In some instances the assets to be leased back may be sold for more than original cost, the sale proceeds either being taken into account in computing chargeable gains and covered by otherwise unrelieved capital losses, or not taxable at all. This is a feature of some of the more tax orientated arrangements. These cases should be reviewed carefully not only to consider the treatment of the sale proceeds, but also the rents under the lease-back. Where significant amounts are at stake, you may seek further guidance from BTD4 Leasing.