BLM70225 - ‘Income-into-capital’ schemes and back loaded leases: Introduction to 'income-into-capital' schemes: Chapter 2 of Part 21 of CTA 2010 - consolidated accounts

A further feature of ‘income-into-capital’ schemes is that the accountancy profit may well appear in no individual group company. The lessor company itself gets a small amount of rental income which is all that it shows in its accounts. The parent of the lessor company has a capital gain which, again, is all that it shows in its accounts. The true earnings of the lessor group from the lease only emerge in the results for the whole group - the ‘glossy’ accounts for the shareholders - which are not the results of any individual company and therefore do not feature in any tax computations. That is why it is necessary to look to the overall commercial reality of the transactions shown only in the consolidated group accounts.