BLM01005 - Introduction: anti-avoidance rules: anti-avoidance rules

This manual is being updated to reflect FRS 102 (2024 amendments). For guidance on the tax treatment of accounts prepared under IFRS 16 or the revised FRS 102, please refer to pages within the BLM50000 chapter.

The vast majority of leasing does not involve tax avoidance. Nevertheless, if someone wants to avoid tax, either directly or indirectly, leasing may provide the means by which this is achieved.

Lessors have created further tax advantages which were never intended.

Over the years various avoidance risks have been addressed in legislation:

  • ITA07/S75 (sideways loss relief from leasing) - see BLM01010
  • CTA10/Ss863-866 / ITA07/Ss681C-681DP (leasing of assets other than land) - see BLM01015
  • CTA10/Ss834-862 / ITA07/Ss681A-681BM (sale and leaseback of land) - see BLM01020
  • Part 21 CTA10 / Part 11A ITA07 (back-loaded leases and ‘income-into-capital’ schemes) - see BLM01025
  • Part 16 CTA10 / ITA07/Ss809AZA-809CZC - (disposal of income streams) - see BLM01030
  • CTA10/Ss382-437 (sale of lessors and similar arrangements) - see BLM01035.