Finance Leasing Manual - FLM20.12

Schedule D Case I: capital allowances

Whatever machinery and plant allowances are due go to the legal owner of the asset (the lessor), unless there is a purchase option in a lease, in which case the allowances go the hire purchase lessee. The relevant capital allowances instructions are CA2050 (writing down allowances) and CA2180 (hire purchase). Industrial buildings allowances (including allowances for buildings in enterprise zones) go to the holder of the 'relevant interest' (CA1090 onwards). There is no hire purchase rule as in the case of machinery and plant (CA1100).