Sale and leaseback: What are the tax consequences? 

Sale and leaseback arrangements allow asset owners to sell the asset while retaining the use of the asset sold through a leaseback arrangement. Generally, lease payments are deductible when they are paid or become payable in the calculation of taxable income. 

Under certain circumstances, the acquirer of the asset who becomes a lessor can claim wear & tear on the asset used by the former owner, the lessee. Sale and leaseback transactions can offer needed cash flow for businesses while providing tax planning opportunities. 

Get more insights on sale and leaseback arrangements in our latest article.