Finance Lease is the most common and popular form of lease, often used for specific purposes such as the taxation advantage gained from leasing low depreciating items and end of financial year planning including prepayment of next year lease instalments.
A finance lease is treated as a rental for accounting and taxation purposes – the whole of each payment is an expense, tax deductible and has GST added.
Goods are purchased by the financier (lessor) at the request of the customer (lessee). The financier remains the legal (and taxation) owner of the goods and the lessee pays rental instalments. At the end of the lease term a residual (lump sum) which reflects the true depreciated value of the goods becomes due. The customer must indemnify the financier for the value of the residual: pay it in cash or finance for a further term, after which time the customer can become owner of the goods.
- terms of 1 to 5 years available with monthly, quarterly, half annual and annual payments
- equity (deposit) from cash or trade in may be used for upfront payments
- payments (rentals) are wholly deductible
- must have a residual which should reflect the true depreciated value of the goods at the end of the term
- great for low value goods and those with low depreciation rates
- equally useful for end of year tax planning
- new or used goods
australiawide FINANCE has the knowledge, experience and contacts to deliver the greatest lease advantages to our customers
