BLM30620 - Taxation of leases that are not long funding leases: passing on the benefits: where lessee is liable to tax
»Ê¹ÚÌåÓýapp finance lessor doesn’t always benefit from timing gains when all the variables are taken into account. Even where the lessor can afford to make lower charges than a lender, leasing isn’t always better than borrowing for the user of an asset. Where the user is a tax payer they are interested in a ‘net present valueâ€� comparison of the cash flow effects for it of the leasing and borrowing options available. One obvious point is that a tax-paying borrower gets the cash-flow benefit of the capital allowances.