Finance Leasing Manual - FLM36.27

Catching-up charge: Schedule A lessors: bad debts

For periods of account beginning before 1 April 1998 Paragraph 13(7) Schedule 12 FA 1997 contains a special rule to ensure the measure of income which is the subject of the catching up charge is not excessive in the (rare) case of a lease where the rents:

• are within the corporation tax Schedule A charge, and

• have been reduced by relief for bad debts under Section 41 ICTA 1988.