S.L. 123.88 Art. 3Finance leases.

(1) A finance lease is constituted by the lease of an asset on or after the 1st January, 2005 involving the payment by the lessee to the lessor over a number of years of the full, or nearly the full cost of the asset together with a return on the finance provided by the lessor and such other remuneration as may be reasonable in the circumstances of the case. The lessee shall substantially assume all the risks and rewards normally associated with the ownership of an asset, other than the legal title thereto.

(2) A contract of hire purchase, a lease purchase agreement, an operating lease and similar arrangements, as well as sale and leaseback transactions shall not constitute a finance lease.