Finance Leasing Manual - FLM31.57

Fourth condition: 'accountancy rental earnings' must exceed 'normal rent'

The condition in Paragraph 3(4)Schedule 12 FA 1997 is aimed at excluding leases where the income from a finance lease shown in the accounts drawn up under SSAP 21, the 'accountancy rental earnings', is taxed year by year. Since the SSAP 21 income will represent the full amount of the 'interest' on the 'loan' as it accrues there is in these circumstances no scope for turning income into capital.