BLM70401 | ‘Income-into-capital’ schemes and back loaded leases: Definition of a Chapter 2 of Part 21 of CTA 2010 lease: introduction

Chapter 2 of Part 21 of CTA 2010 is aimed at finance leases that are capable of allowing the lessor (or a connected person) to get back any of the return on the lessor’s outlay as a capital sum, rather than rental income.

A Chapter 2 lease (see BLM70410) is one which simultaneously satisfies the five conditions set out in CTA10/S902 (see BLM70415). Once it has satisfied those conditions it remains within Chapter 2 until it is terminated or assigned to (broadly) an unconnected person.