Skip to content
srilawsby aturio
As enacted
EnglishSinhala සිංහල, official PDF on documents.gov.lkTamil தமிழ், official PDF on documents.gov.lk
Contents

Part I

49. Transfer by way of security, finance lease or instalment sale

Official English translation. The Sinhala text prevails. Open the official Sinhala text, official PDF on documents.gov.lk

(1)

Where a person grants a mortgage (legal or equitable) or similar form of security over an asset to secure a debt owed to another person –

(a)

the first person shall not be treated as realising the asset or any part of it, but shall be treated as still owning the asset and as having incurred a liability being the secured debt; and

(b)

the other person shall not be treated as acquiring the asset or any part of it, but shall be treated only as owning the secured debt.

(2)

Where an asset is leased under a finance lease, the lessor shall be treated as transferring ownership of the asset to the lessee.

(3)

Subject to section 46 where a person transfers an asset under an instalment sale or, under a finance lease under subsection (2) –

(a)

the person shall be treated as deriving an amount in respect of the transfer equal to the market value of the asset immediately before the transfer; and

(b)

the person who acquires the asset shall be treated as incurring expenditure of the amount referred to in paragraph (a) in acquiring the asset.

(4)

Where a lessee under a finance lease returns the asset to the lessor before ownership passes to the lessee (except the transaction referred to in subsection (2)) the lessee shall be treated as transferring ownership of the asset back to the lessor.

(5)

In this section, “finance lease” and “instalment sale”

shall have the same meaning as in section 31.

Read on from s 50

Part II

Read on from Part II

Schedules