BLM71040 | ’Income-into-capital’ schemes and back loaded leases: 'Income-into-capital' schemes: borrower carries all the tax risks

An important condition of most finance leasing schemes is that the Borrower carries all the tax risks. If there is new legislation which reduces the Bank’s profit, the Bank maintains its turn on the transaction by charging the Borrower extra. This has an important practical consequence: Chapter 2 of Part 21 of CTA 2010 is directed at the Bank but will impact the Borrower.