Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Recharacterisation of certain transactions - Recharacterisation of certain commercial arrangements

FA 8: Deductibility of expenditure under finance lease

You could also call this:

“You can claim depreciation on property you lease under a finance lease”

If you have a finance lease for personal property, you are treated as if you own the property when it comes to depreciation. This means you can claim depreciation on the property as if you were the owner. The person who leased the property to you is not considered the owner for depreciation purposes. This applies to a part of the tax law called subpart EE, which deals with depreciation.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1516282.

Topics:
Money and consumer rights > Taxes
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“How to calculate the loan amount in a finance lease”

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FA 9: Treatment when lease ends: lessee acquiring asset, or

“Rules for buying leased items and how it affects your taxes”

Part F Recharacterisation of certain transactions
Recharacterisation of certain commercial arrangements

FA 8Deductibility of expenditure under finance lease

  1. The lessee under a finance lease is treated as the owner of the personal property lease asset for the purposes of subpart EE (Depreciation).

  2. The lessor under a finance lease is not treated as the owner of the personal property lease asset for the purposes of subpart EE.

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