539 Disposals in cases of hire purchase and similar transactions

(1) A hire purchase of an asset is treated, as regards both parties to the agreement, as an outright disposal of the asset at the beginning of the period of hire. However, if the hire terminates without the property in the asset passing to the person having the use or enjoyment of the asset (for example, by repossession for failure to pay the instalments), the necessary capital gains tax adjustments, whether by way of repayment of tax or discharge, is to be made on the basis that there was in fact no disposal of the asset in the first instance. This treatment also applies to other transactions under which the use and enjoyment of an asset is obtained by a person for a period at the end of which the property in the asset will or may pass to the person.

(2) Notwithstanding the general time limit for making a claim for a repayment of tax set out in section 865, any excess tax paid may be repaid by the Revenue Commissioners where a claim for the relevant adjustments is made within 4 years from the end of the chargeable period in which the termination referred to in subsection (1) occurs.

Relevant Date: Finance Act 2019