The fundamental characteristics of a Finance Lease is that the ownership never passes to you.
As a result, the Leasing company claims the capital allowances and passes that benefit on by reducing your rental charges.
You will be responsible for the maintenance of the equipment and can usually deduct the full cost of Lease rentals from your taxable income as a trading expense.
The Leasing company recovers the full cost of the equipment, plus charges, over the period of the Lease and, although you don’t own the equipment, you will have most of the ‘risks and rewards’ associated with ownership.
When the Lease period ends, you have a number of options.
The Leasing company will usually agree to a secondary Lease period or, if you wish to stop using the equipment, it can be be sold second-hand to an unrelated third party.
You will have to arrange the sale on behalf of the Leasing company and the Leasing company will obtain the bulk of the sale proceeds.