For a gain or loss to be within the scope of tax on chargeable gains, there must be a chargeable disposal of a chargeable asset by a chargeable person. See C1.307, C1.301 and C1.102 respectively. This article summarises the tax treatment in relation to contracts for hire purchase. For the tax treatment of long funding leases of plant and machinery, see C1.310A.
Individuals, trustees and personal representatives are subject to capital gains tax on chargeable gains. Companies are subject to corporation tax on chargeable gains. See C1.102.
For a discussion of the computation of chargeable gains and losses, see C1.105. For the rates of tax that apply to chargeable gains, see C1.107.
Contracts of hire purchase
Under hire purchase, the hirer enters into a contract with the owner for the use of the asset during the term of the contract. Payment is made by the hirer for use of the asset during the hire period. Usually the title to the asset passes to the hirer at the end of the term, unless they do not fulfil
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