BLM70575 - 鈥業ncome-into-capital鈥� schemes and back loaded leases: Definition of a Chapter 2 of Part 21 of CTA 2010 lease: Condition D: definition of rental earnings
For any period of account, 鈥榬ental earnings鈥� are the 鈥榓mount which falls for accounting purposes to be treated in accordance with GAAP as the gross return for that period on investment in respect of a finance lease鈥� (or loan)鈥� (CTA10/S898).
The references to accounting purposes and practice are subject to CTA10/S935 and the definition of 鈥榓ccounting purposes鈥� in CTA10/S937. The effect is to focus on what is correctly shown as the gross return on investment under GAAP. In practice, that will normally be the 鈥榞ross earnings鈥� as defined in paragraph 28 of SSAP21, and 鈥榝inance income鈥� in FRS101, FRS102 and IFRS. The use of consolidated accounts and those of connected persons is explicitly dealt with in CTA10/S897 - see BLM70585.