Finance Leasing Manual - FLM20.10

Schedule D Case I: whether trading

In general, where chattels are leased, it should be accepted that the leasing is by way of trade. In exceptional cases, however, where the evidence of trading is extremely slight, for example if only one asset has been acquired for leasing and there is no personal involvement by the taxpayer or any semblance of a trading organisation, the taxpayer's activities are more likely to be in the nature of an investment, with the income assessable Case VI, than trading. Case I treatment should not be refused where, although there is no personal involvement by the taxpayer, there is trading activity by a manager as agent for the taxpayer.