S.L. 123.88 Art. 5Determination of chargeable income.

For the purpose of determining the income chargeable to tax under the Act of a lessor and of a lessee, notwithstanding the provisions of rule 3 of the Income Tax (Deductions) Rules, the following arrangements shall apply in the case of a qualifying finance lease:

(a) without prejudice to the right for any deduction properly attributable there against, the lessor shall be chargeable to tax on the full amount of the annual lease payments;

(b) the lessor shall be entitled to a deduction in respect of the wear and tear of the leased asset in accordance with the provisions of article 14(1)(f) of the Act;

(c) the lessee shall be entitled to a deduction in respect of the full amount of the lease payments made by him in respect of the leased asset as well as all other deductions properly due under article 14 of the Act: provided that no deduction under subarticle (1)(f) of the said article shall be granted.