Taxes Consolidation Act 1997 section 379

Cars: provisions where hirer becomes owner

Section 379 sets out how tax relief is recalculated when a person who has been hiring an expensive car (otherwise than under a hire-purchase agreement) later becomes its owner.

• Applies where a hirer of a car becomes its owner and the car's retail price when made exceeded the specified amount.
• Total hire payments and acquisition cost, up to the car's retail price, are reclassified as capital expenditure on the vehicle.
• That capital expenditure is treated as having been incurred when the hiring began, so capital allowances are restricted as if the car had been bought outright at the outset.
• Only the excess of total payments over the retail price remains as hire expenditure, spread rateably across the hire period, with earlier hire deductions adjusted accordingly.