Finance Leasing Manual - FLM26.04

Back loaded leases: pre Schedule 12 FA 1997

The reasons for avoidance or deferral of tax being possible pre-Schedule 12 FA 1997 differed depending on whether the lessor's earnings were taxable under Schedule A or under Schedule D Case I. But common to both situations was that the lessor was reporting higher earnings in its commercial accounts than it contended should be taxed, so enhancing the timing gains produced by the tax consequences.