Finance Leasing Manual - FLM40.13

Legal expenses: capital allowances position

The capital allowances position does not normally determine the treatment of something for Schedule D Case I purposes and indeed depends on a specific statutory rule, the 'belonging' test in CAA 1990, which is interpreted as a test of legal ownership. The view that the different interests in an asset (leasehold, reversionary and so on) constitute separate assets is better established in the real property field than it is in the case of chattels.