Finance Leasing Manual - FLM1.24

Hire purchase leases

Where the lease is essentially a finance lease but with an option for the lessee to buy the asset for a nominal sum the accountants still treat the deal as a finance lease. But the tax treatment may be different if the asset is machinery and plant and Section 60 CAA 1990 applies to treat the asset as belonging to the lessee (rather than to the lessor) for capital allowances purposes. Further guidance on hire purchase is at IM710 onwards and CA2180 onwards.