Finance Leasing Manual - FLM33.18

Cumulative accountancy rental excess: example 2

Example 1 in FLM33.12 shows the cumulative accountancy rental excess brought forward and set off during the first 6 years of a lease. If in Example 1 the leased asset was sold by the lessor for £25,000 at the end of period 3 the cumulative accountancy rental excess ('CARE') at the end of that period (£1400 - see table below) is set against the £25,000 in the capital gains computation.

Example 2