Finance Leasing Manual - FLM28.18

Income-into-capital schemes: other features

'Income-into-capital' schemes may include the following further features:

• the asset is sold by one member of the Borrower group and leased back to another;

• very occasionally the purchase option is not over the asset but over the shares in the Bank's leasing subsidiary (which is formed just for the purpose of holding the property) - see FLM31.29;

• the purchase option is held by another member of the Borrower's group (that is, neither the original seller nor the lessee).

The third variation above is common because it gives the Borrowing group indirect relief for the interest on the capital sum. Further details about this are at FLM30.01 onwards.