379 Cars: provisions where hirer becomes owner

This section applies where a person who had hired (otherwise than by way of hire-purchase) a car costing in excess of the specified amount subsequently becomes its owner. Where this happens, so much of the person’s total expenditure on both hire and acquisition as does not exceed the retail price of the car when it was made is to be treated as capital expenditure on the acquisition of the car and the taxpayer’s capital allowances are to be restricted to what they would have been had the taxpayer purchased the car for that amount in the first place. Only the excess of the total expenditure over the assumed purchase price is treated as a charge for hire and apportioned rateably over the hire period with consequential adjustment of the deductions for hire already allowed under section 377.

Relevant Date: Finance Act 2021