BLM32225 - Taxation of leases that are not long funding leases: finance lessees: taxation generally: capital/revenue issues, hire purchase and lease purchase agreements

If the agreement provides for legal ownership of the asset to pass to the hirer or gives the hirer an option at any point to purchase the asset concerned, the arrangement may be a hire purchase or lease purchase agreement. Under such agreements part of the rental payments may be capital expenditure on the right to purchase the asset.

Guidance about leases with options is at BLM00325 onwards.

Guidance on the capital allowances consequences of hire purchase agreements when the asset is plant or machinery is at CA23300 onwards.