BLM70020 | ‘Income-into-capital’ schemes and back loaded leases: Introduction to back-loaded leases: lessors' earnings within property income

Many, if not quite all, of the finance leases in ‘income-into-capital’ schemes involved real property assets. By exploiting the differences between the then ‘entitlement’ basis for property income and the ‘accruals’ basis, it was easy to ensure that the rentals taxable in any period were the low amount desired by the lessor even though they were reporting higher earnings in their commercial accounts.