Jurisdiction(s):
United Kingdom

Key definition

Transaction definition

What does Transaction mean? A transaction describes a legally binding dealing or arrangement by which assets, securities, services or obligations are created, transferred, varied or extinguished, whether as a single step or a series of steps. In practice this includes corporate acquisitions and disposals, real estate conveyancing, lending and taking security, restructurings, derivatives and other commercial dealings. In capital markets, a transaction commonly means the purchase, sale, subscription or underwriting of a particular investment. The term is a descriptive umbrella used across multiple legal contexts rather than a term with a single statutory meaning. Specific legislation, regulatory rules and contracts may define “transaction”...

Alternative international leasing structures: synthetic leases, Japanese operating leases (JOL/JOLCO), German KG operating leases and French tax leases

Published by a LexisNexis Banking & Finance expert

Practice notes

This Practice Note considers important alternative forms of leasing that may arise beyond conventional operating or finance leases. The most appropriate structure selected for any transaction will change from time to time, shaped by the taxation environment and by the regulations that exist in the relevant countries in which the arrangement is to be structured. As most leasing arrangements are set up to secure the maximum tax benefits and allowances available, the structure adopted will, to a significant extent, depend on the tax and accountancy laws in the particular jurisdiction.

Synthetic leases

Originating in the United States, synthetic leases are structured so that, for accounting purposes, they are recognised as a lease, yet for US federal tax purposes they are treated as a loan.

These leases are typically employed to fund the construction or acquisition of property projects, significant assets or equipment, and can finance the entire cost at competitive rates without calling on corporate credit facilities.

In practice, these arrangements are frequently deployed for the construction or purchase of property projects, substantial assets or equipment.

For accounting purposes, a special purpose vehicle (SPV) owns the asset and leases it to the operating company (the lessee) under an operating lease...

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Web page updated on 21/05/2026

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