Finance Lease
What is a Finance Lease?
A finance lease is an arrangement between a financier and a customer. The financier finances the vehicle on behalf of the customer for a fixed monthly payment. The financier retains ownership of the vehicle until the end of the lease.
Tax implications
Some or all of the GST component on the monthly repayments and the residual value can be claimed by the customer. The customer claims it as an input credit on their business activity statement.
As long as the amount financed is below the depreciation limit (subject to change annually) the customer claims the lease rental as a tax deduction. If a vehicle is above the depreciation limit customers can claim up to the limit and any interest and charges.
Low Doc Car Loans
Self Employed - No Financials. A Low Doc Car Loan is perfect for the self-employed ABN holders who don’t have financial statements or payslips. This type of loan allows customers access to low rates, great terms minimal fees and charges without having to provide any proof of income. The application process is fast easy and quick, we don’t require months and months of bank statements or ridiculous amounts of information.
The only requirement for our low doc no financials product is a current ABN which is registered for GST. These loans have very competitive fixed interest rates and terms. They are available with residuals and have all the tax deduction benefits other commercial loans offer.
Commercial Hire Purchase
What is a Commercial Hire Purchase?
A Commercial Hire Purchase is an arrangement between the customer and financier. The financier agrees to purchase the vehicle on behalf of the customer; in return the customer agrees to hire it from the financier for the term of the loan. Once the final payment has been made ownership of the vehicle is transferred into the customer’s name.
Tax Implications
Customers with an ABN can claim some or all of the GST of the purchase price of the vehicle. Depending on an accrual accounting or cash accounting system the GST is claimed quarterly or in installments on the Business Activity Statement (BAS). Again the depreciation limit comes into effect with a CHP.
Chattel Mortgage
A Chattel Mortgage is where the financier funds a vehicle for the customer. The customer agrees to make repayments to the financier and takes ownership of the vehicle at the time of purchase. An encumbrance is taken over the vehicle by the financier and released once the contract has ended.
Tax Implications
With a chattel mortgage the GST and depreciation to the current depreciation rate is claimed. There is no GST on repayments or the residual value. GST is claimed on the purchase price of the vehicle.
Novated Lease
See Novated Lease.
Fully Maintained Novated Lease
See Fully Maintained Lease.
