»Ê¹ÚÌåÓýapp

»Ê¹ÚÌåÓýappre are two different arguments for regarding expenses incidental to the creation of the lease itself as revenue expenditure. »Ê¹ÚÌåÓýapp simpler, and more radical, of the two arguments for regarding the expense as revenue takes this ‘economic substanceâ€� approach at face value would be that

• a finance leasing business is in substance, if not in form, a type of banking business involving the making of loans secured on particular assets - see the accounting treatment,
• the incidental expenses incurred by a bank in making such loans are revenue,
• Another way of putting much the same point, but having more regard to the legal form of the transactions, would be that,
• the incidental expenses of entering into a lease need to be distinguished from the expenses of acquiring the leased asset,
• the fact that such expenses would be capital in the hands of the lessee where the lease is a means of providing fixed assets of his business is irrelevant,
• finance leases, from the lessor’s point of view, are agreements which directly generates income (contrast the lessee’s position) - they are ‘disposalâ€� rather than ‘profit-making structureâ€� agreements in the terminology used in such cases as John Mills Production Ltd v Mathias (see pages 454/5 of 44 TC),
• the negotiation of such agreements is an ordinary incident in the income generation process (in the same way as a bank makes loans).