Section FA 6 — Income Tax Act 2007: Recharacterisation of amounts derived under finance leases

FA 6 Recharacterisation of amounts derived under finance leases When a personal property lease asset is leased under a finance lease, the lease is treated as a sale of the lease asset by the lessor to the lessee on the date on which the term of the lease starts, and— (a) the lessor is treated as giving a loan to the lessee for the lease asset; and (b) the lessee is treated as using the loan to buy the lease asset; and (c) subpart EE (Depreciation), the financial arrangements rules, and the other provisions of this Act apply to the arrangement as recharacterised. Defined in this Act: finance lease , financial arrangements rules , lessee , lessor , loan , personal property lease asset , term of the lease , Compare: 2004 No 35 ss FC 8A(1) , FC 8F , FC 8G