Finance Leasing Manual - FLM34.16

Bad debts: reducing cumulative accountancy rental excess: where there will be a practical effect

The cases where a Paragraph 9 Schedule 12 FA 1997 restriction will have a practical effect are limited to those where:

• subsequent to the bad debt write off the payment of rentals under the lease is resumed; or

• the lessor's outlay on the leased asset does not wholly qualify for capital allowances and capital losses can be recognised on its sale.