While Borstad and Mimetix established that the tenants concerned did not acquire real estate in accordance with the respective leases, other cases in the common law provinces found that the tenants acquired property on the basis of a financing lease or lease. In Kamsel Leasing v.M.N.R., Canada`s tax court followed the subject`s argument that the leases he entered into in connection with his leasing activity had “essentially transferred all property benefits and risks” to the tenants. [42] Of particular importance to its conclusion that the transactions were duly labelled as a sale and not as a lease, the court found that the tenants had “the right, at the expiry of the lease agreement, to acquire the property at a price which, at the beginning of the lease agreement, could be substantially less than the likely fair value of the property at the date of the authorized acquisition.” the possibility of acquiring the property at a price that, at the beginning of the lease, was such that no reasonable person abstained from practising” and “a significant percentage of the tenants made use of this opportunity.” [43] Similar to M.N.R. Moore, the Bundesgerichtshof concluded that the taxpayer and other investors had acquired capital real estate under a 60-year lease with an option to purchase, for which they had prepaid the rent for the duration. The court found that they “essentially acquired all the advantages and risks associated with ownership of the property” and that there was “reasonable assurance” that they would “exercise their option to purchase the land as they had to build a 33-unit building on the site.” [44] Although none of these cases conducted the dual real estate acquisition test at Wardean Drilling, the language and argument are in any case similar to the second branch of this test. Return to sale can include either the country, but also improvements. As a general rule, rents are set to provide for amortization of the purchase price over the life of the lease, plus a certain return on the buyer`s investment. Discussion on the application of page 16 (1) to a sale lease agreement labelled as a sale where the fair value of the property is lower than future rents. Improves balance sheet and credit rating.

In the case of a sale reve-back, the seller replaces an investment (the property) with an asset in progress (the proceeds of the cash sale). If the lease is considered a lease, the seller`s lease obligation is usually indicated in a footnote on the balance sheet and not as a liability. The result is an increase in the seller`s current ratio or the ratio of short-term assets to short-term liabilities – which is often an indicator of a borrower`s ability to meet short-term obligations. An increase in the electricity rate thus improves the seller`s position in borrowing additional future funds. 2. In normal circumstances involving lease option contracts where there is a genuine tenancy agreement, a reasonable rent paid before the purchase option by the taker is considered a rental charge for the taker and an income for the lessor, even if, at the time of the exercise of the purchase option, a discount or discount on the purchase price is granted for a portion of the previous rent.