Ship shape

The shipping tax lease is alive and well and living in the UK. But with recent legislative changes curtailing the benefit of leases into tonnage tax companies, it could be a year of upheaval, as arrangers search out new methods to bring the most advantage to lessors and keep a high NPV benefit for l...

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Bibliographic Details
Published in:Asset Finance International 2003-03, p.1
Main Author: Bedell, Denise
Format: Article
Language:English
Subjects:
Banks
Business conditions
Equipment financing
Investors
Leases
Leasing
Lessors
Operating leases
Restrictions
Shipping industry
Tax legislation
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Summary:The shipping tax lease is alive and well and living in the UK. But with recent legislative changes curtailing the benefit of leases into tonnage tax companies, it could be a year of upheaval, as arrangers search out new methods to bring the most advantage to lessors and keep a high NPV benefit for lessees. For those lessees who do offer a good credit risk, the opportunity is there, and the reward is certainly worth the effort. The advantages are, of course, the reduced tax environment and fast depreciation, plus a high NPV benefit. One big development is the change to the treatment of leasing into tonnage tax companies, which the government announced in December. The new provision, which will be introduced with the next finance bill, will treat operating leases as finance leases are treated when it comes to capital allowances and the tonnage tax.
ISSN:1367-8086