BLM36005 - Taxation of leases that are not long funding leases: lease and leaseback: introduction

This section of the guidance deals with the lease and leaseback of plant or machinery.

Transactions involving lease and leasebacks of plant or machinery are almost always structured that way for tax purposes. CS&TD have not seen any, in recent years at least, that do not involve active tax planning. That does not mean, however, that none are entered into without an intention to avoid tax. Therefore, if you see a lease and leaseback transaction it is important that you make sure you fully understand precisely what is involved, and the tax consequences that flow from it. Lease and leaseback transactions can probably be divided into two types: those where the head lease is for a premium (see BLM36010), and those where it is not (see BLM36015).