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Treatment of PCP loans

Answer
Eloise Brown
Posted Mon, 25 Nov 2024 11:07:42 GMT by Eloise Brown
If a limited company enters into a PCP lease with no intention to make the final balloon payment, is this treated as an operating lease in the accounts? Receiving Corporation tax relief on the lease payments when made? Rather than capital allowances.
Answer
HMRC Admin 19 Response
Posted Mon, 02 Dec 2024 12:22:24 GMT by HMRC Admin 19 Response
Hi,
That is correct as the lease item is not fully owned by the company until the final payment is made.
Thank you.

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