Finance Leasing Manual - FLM28.25

Income-into-capital schemes: finance lessee's position

The lease in an income-into-capital scheme is likely to be a finance lease from the lessee's (borrower's) end and relief for payments will be given on the normal SP3/91 basis. However, any sum paid for the property under an option will be capital, and so no revenue deduction should be due for the payment - see FLM13.44 onwards.