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Leasing Matrix

PRODUCT

Operating Lease
Rental

Finance Lease Novated Lease
Commercial Hire Purchase/Asset
Purchase (CHP)Chattel Mortgage

Flexibility Highly flexible - easy upgrades & add ons at any time with a simple contract variation. Often possible with no change to the instalment amount
Less flexible - can only upgrade by payout of the existing contract & applying for a new one.

Less flexible - can only upgrade by payout of the existing contract & applying for a new one.

Less flexible - can only upgrade by payout of the existing contract & applying for a new one

Repayments
Tax Treatment
Business use. Instalments 100%deductible
Business use. Instalments 100%deductible Business use. Net payments ex GST are taken from employees pay reducing taxable income
Business use.
The interest component only is deductible + ATO allowable depreciation

Residual Risk None
An agreed residual value is owed at the end of contract term. This can be nil

An agreed residual value is owed at the end of contract term. This can be nil
An agreed residual value is owed at the end of contract term. This can be nil

Ownership
Lessor
Equipment is generally returned, upgraded or re-rented at end of term.

Lessor
Ownership is usually available on payment of any residual value.*

Lessor
Ownership is usually available on payment of any residual value.*

Lessee
Ownership at commencement of term. Contract finalised on receipt of all payments & any residual value

Accounting
Treatment/
Depreciation
Benefit

Instalments are an operating expense. No balance sheet liability. Depreciation - Lessor

Noted on the balance sheet as capital expenditure. Depreciation - Lessee

Noted on the balance sheet as capital expenditure. Depreciation - Lessee

Noted on the balance sheet as capital expenditure. Depreciation – Lessee

GST Treatment
The GST is not financed & is added to the monthly instalment.GST is then claimed by BAS return.

The GST is not financed & is added to the monthly instalment. GST is then claimed by BAS return.

The GST is not financed & is added to the monthly instalment. Employee is responsible for the GST on the residual value.

GST is included in the amount financed. No GST is added to the monthly instalment. Chattel Mortgage Can claim 100% of GST upfront.

Lessor – someone who grants a lease = Mortgagee a body providing a mortgage.
Lessee – someone with a lease = Mortgagor a person making the payments.

* Financier retains legal title during and after the term of the agreement. However, at their discretion, the financier will usually consider an offer to purchase the goods at the agreed residual value at end of lease term.

Please Note: We do not provide Tax Advice. Your accountant should answer any tax related questions.

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	Please note: Ausco Trading Pty Ltd takes no responsibility for the accuracy of this information. Car Finance Australia make all reasonable efforts to maintain accurate information. However all credit information should be used as a guide only. We urge users to check the terms and conditions on the specific credit applications when applying. You should check all costs related to any credit application with your financial adviser before making purchase decisions.