Taxation of Chargeable Gains Act 1992 section 27

Disposals in cases of hire-purchase and similar transactions

Section 27 deals with how hire-purchase and similar arrangements are treated for capital gains tax purposes, deeming them to be outright disposals from the outset.

• A hire-purchase or similar transaction is treated as an outright disposal of the asset at the start of the hire period, for both parties
• This applies to any arrangement where a person obtains use and enjoyment of an asset and ownership will or may pass to them at the end of the period
• If the arrangement ends without ownership passing to the user (for example, due to repossession), tax adjustments are made as if no disposal had occurred
• Adjustments may take the form of repayment of tax, discharge of tax, or other appropriate corrections