Commercial Hire Purchase

The client claims depreciation and an interest component for tax purposes. GST is paid up front on the purchase and not paid on the repayment. GST is claimed over the course of the loan contract.

Commercial Hire Purchase is similar to a finance lease in that substantially all the risk and benefits relating to ownership reside with the hirer.

Under a Commercial Hire Purchase, the hirer contracts to pay hire charges for a fixed period at the end of which the legal title to the property passes to the hirer. Until all the hire charges have been paid, legal title remains with the owner (the Financier).