My company has a lease with a finance company for some machinery. The finance company have a charge over my property which has plenty of equity in it.We require additional capital and ask the finance company for an additional Â£50,000 which is obviously secured by the equity in the property.
The finance company says this would be money lending so would need to draw up another lease. We do not have any further plant on which to draw up another lease so they suggest selling the office furniture & computers to them and leasing them back ( sale & leaseback ). The value of the furniture etc; is probably worth only Â£500 tops, but this can be classed as consideration for the purpose of the lease.
My accountant sees the new lease agreement in my books and claims the available taxes back etc;
As the value of the consideration is so low is this a form of tax evasion/tax fiddle on our part?
We then find that the finance company has our property along with many others secured with various banks and other leasing companies etc; to the tune of 26 million pounds. They obviously believe that the money they have lent to the finance company is secured by the value of the equipment which is on lease and also the value of the properties.
Are they defrauding their creditors by leading them to believe that the value of the leased equipment is worth a lot more than it is? In our case the undervalue of the leased equipment is Â£49,500, if you take the figure of 26 million and a small percentage of the rest of their deals are the same ( i know of one other deal where the loan to value has a shortfall of 120k ) we are talking a lot of money, and a lot of tax being claimed back which shouldn't be.