BLM70220 - 바카라 사이트˜Income-into-capital바카라 사이트™ schemes and back loaded leases: Introduction to 'income-into-capital' schemes: Chapter 2 of Part 21 of CTA 2010 - capital allowances
Another feature of 바카라 사이트˜income-into-capital바카라 사이트™ schemes is that the full 바카라 사이트˜capital바카라 사이트™ element in the rentals is often not taxed, as it should be in the normal case. Taxation of the full rentals is necessary to balance the availability of capital allowances to the lessor. But in these schemes the capital element (or some of it) comes in the lump sum paid by the lessee under the option to buy the asset and is not taxed at all.
In the ordinary way the capital allowances disposal computation when the asset is sold should ensure that the lessor only gets relief for the net depreciation of the asset. For example, if a lessor buys an asset for £1m, capital allowances will be due on £1m; but if the asset is later sold for £1m the allowances are all clawed back. But under 바카라 사이트˜income-into-capital바카라 사이트™ schemes lessors often side-step the capital allowances balancing adjustments by selling something which is in substance the asset but is technically something else.
Example: Parent Bank sets up a special purpose leasing subsidiary for a deal. The subsidiary buys the asset and leases it to the lessee. When the 바카라 사이트˜loan바카라 사이트™ comes to be repaid the bank sells the shares in its leasing company to the lessee바카라 사이트™s parent instead of the leasing company selling the asset to the lessee. The price for the shares will, of course, be the amount needed to repay the loan with interest. There is a capital gain but it will likely be eliminated or reduced by indexation etc. In practical terms for both the lessor and lessee groups of companies it is just the same as if the asset itself had been sold.