Melbourne Finance Lease is a tax-efficient tool to satisfy business needs without tying up capital. Melbourne Finance Lease can also include your on-road charges and Melbourne Finance Comprehensive Motor Vehicle Insurance. To assist in salary packaging, Melbourne Finance Lease can be used in conjunction with a Novation Agreement.
Lease payments are made from pre-tax income, not after-tax profits, enabling a business to preserve cash flow and utilise the capital elsewhere in the business.
Where the vehicle is used for income-producing purposes, a tax deduction may be claimed by the lessee. Where the amount financed is below the Depreciation Limit ($57,009), a lessee may claim the monthly repayment as a deduction. Above the Depreciation Limit, interest charges on the contract and depreciation up to the value of the Depreciation Limit ($57,009) are deductible.
Flexible contract terms from 24 to 60 months are available, and as the residual value can be varied according to the contract term, repayments can be tailored to suit your budget. In conjunction with a Novation Agreement a Melbourne Finance Lease is an ideal way to salary package a vehicle.
The Goods and Services Tax (GST) is included in the purchase price of the vehicle and the financier will apply Input Tax Credits to offset this GST (to a maximum of $5,183), meaning that the amount you finance under a Lease is therefore lower than the purchase price of the vehicle.
Where the lessee is registered for GST purposes, input tax credits may be applied to offset some or all of the GST on both the lease rental and the residual value, depending on the amount of business use you can demonstrate.