Finance Lease Taxation: Giving Tax Losses to Lenders

Journal of Law and Financial Management, Vol. 6, No. 1, pp. 30-35, June 2007

10 Pages Posted: 23 Apr 2008

See all articles by Gordon Mackenzie

Gordon Mackenzie

University of New South Wales - Australian Taxation Studies Program (ATAX)

Geoffrey Hart

affiliation not provided to SSRN

Abstract

Accounting standards characterise leases as either finance or operating, with the difference between the two based on concepts of economic ownership, but Australian taxation law does not recognise any such difference, except in three limited cases.

The lack of separate recognition of finance leases in tax law produces advantageous tax outcomes including in substance: Deductible repayment of a loan, Deductible of the cost of the leased asset, and Transfer of capital allowance deductions to the non-economic owner.

Keywords: finance lease, operating lease, taxation

JEL Classification: M40, M41

Suggested Citation

Mackenzie, Gordon and Hart, Geoffrey, Finance Lease Taxation: Giving Tax Losses to Lenders. Journal of Law and Financial Management, Vol. 6, No. 1, pp. 30-35, June 2007, Available at SSRN: https://ssrn.com/abstract=1123045

Gordon Mackenzie (Contact Author)

University of New South Wales - Australian Taxation Studies Program (ATAX) ( email )

Sydney, NSW 2052
Australia

Geoffrey Hart

affiliation not provided to SSRN

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
363
Abstract Views
2,237
Rank
149,990
PlumX Metrics