Capital Allowances Act 2001 section 228D

Lessor's income or profits

Section 228D defines what constitutes a lessor's "income from the lease" and "profits from the lease" for the purposes of the long funding lease provisions in the Capital Allowances Act 2001.

• A lessor's income from a long funding lease includes all lease rental payments and any other sums receivable in connection with the lease that are brought into account as income.
• Profits from the lease are calculated as the lessor's income from the lease minus any expenses deductible against that income.
• The definition captures not just the regular rental stream but any ancillary receipts connected with the lease arrangement that form part of the lessor's taxable income.
• These definitions are used elsewhere in the long funding lease rules to determine the extent to which capital allowances can be claimed or restricted in relation to leased assets.

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