Variation in relation to the definition of “finance lease” in s YA 1 of the Income Tax Act 2007
Lessors and lessees may have agreed to extend lease terms (or intend to do so) due to the financial impacts of COVID-19. The time period in the definition of “finance lease” has been extended using s 6I of the Tax Administration Act 1994 to allow certain extended leases to continue to be treated as operating leases.
Tax Administration Act 1994: ss 6H and 6I
Income Tax Act 2007: s YA 1, paragraph (b) of the definition of finance lease