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A ‘qualifying lump sum� is defined in CTA10/S904(2). It has a meaning which is close to, but not identical with, that of a ‘major lump sum� in CTA10/S902(5). See BLM70516 onwards for a detailed description of the definition of a major lump sum.

The similarities are that both a ‘qualifying lump sum� and a ‘major lump sum�:

• must have excluded from it any sum which is ‘rentâ€�;
• must contain an amount which, in accordance with GAAP correctly applied, counts as a return on investment in respect of the finance lease (or loan).

The difference is that a ‘major lump sum� but not a ‘qualifying lump sum� must also contain an amount which in accordance with GAAP counts as a repayment of that investment. In short a ‘qualifying lump sum� but not a ‘major lump sum� may consist solely of return on the investment, in substance interest.